Interest rates are important to financial institutions since an interest rate increase ________ the cost of acquiring funds and ________ the income from assets.

Question

Quizplus · Accepted Answer

An interest rate increase raises the cost for financial institutions to acquire funds (e.g., through deposits or loans) and simultaneously increases the income they earn from assets such as loans and investments, as they can charge borrowers more.

Interest Rates Are Important to Financial Institutions Since an Interest