DIAGRAM THE EFFECT OF EACH OF THE FOLLOWING ON U.S. INTEREST RATES.
1. An increase in the expected rate of economic growth in the United States.
2. An increase in the federal budget deficit.
3. An increase in the expected rate of inflation in the United States.
4. A sharp drop in the savings rate by U. S. households.
5. Increased capital requirements imposed on U. S banks, which makes them less able to lend.
6. An increase in foreign interest rates.
7. Reduced political instability in third world countries, which makes investors in the U.S. and Europe more interested in investing in these countries.
