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For example, every decision consists of an opportunity cost; time, money, raw materials. America’s economy is going through a rough patch that has people wondering whether or not America will go into a recession. Forces of scarcity in economics give rise to the concept of opportunity cost but market forces ration prices. The market forces play a part in the rates set by the FED. The main concern of the FED is to balance inflation and growth of the economy; if growth is too high and inflation rates spike, then higher rates lower down. A perfect example would be in the housing industry. Two years ago interest rates were high because the demand for houses was high...
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