interest rates from 1980 to 1989
I’m being told to discuss interest rates from 1980 to 1989 in relation to:
1) inflation
2) investment
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3) foreign trade
4) gdp
I know that interest rates in the 80s were very high, but I don’t know how that relates to the four macroeconomic indicators my professor wants me to discuss. I’ve read that interest rates were raised to stop rise of inflation, but it’s not cited, so I don’t understand why high interest rates to stop inflation. I also read that interest rates were driven up which appreciated the US dollar, but again, it’s not cited, so I don’t understand why.
If there is any way for you to explain this to me in a “macroeconomics for dummies” way, please do, otherwsie, could you advise a resource that can help me find out how interest rates from 1980-1989 impacted the four indicators?
