• master thesis

The interest rate is the main tool of monetary policy to stabilize the economic situation and this policy implements by the Central Banks. Thereby, When the Central BAnks increase the interest rate, therefore, the commercial banks raise the lending interest rate to businesses as well. Thus the funds for businesses become more expensive and investment projects become less attractive for entrepreneurs. This situation directly affects the level of investment and the GDP level because the investment has positive impacts on the productive capacity of the economy as well as the level of investment.