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The American way of buying expensive items, such as cars or houses is to borrow from financial institutions and pay the money back in small increments on a monthly basis, with interest of course. However, like most other products and services, interest rates fluctuate depending on the steadiness of the economy and supply and demand. Macroeconomics is the study of the economy that considers the problems of inflation, unemployment, business cycles and growth (Colander, 2004, p.12). Interest rates are classified in the macroeconomic theory.
The article, "Interest Rates: A Matter of Supply and Demand" explains the reasoning behind the rise and fall of interest rates...
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