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Interest Rates
Term category: Economics
In 10 words or less:  Interest rates refer to the interest paid to borrow or loan money.

Definition:  The amount of money in percent that a borrower pays to borrow money. For example, if a $100,000 loan has a 5% interest rate, the borrower will have to pay $5,000 each year until the money is paid back.

StockJargon Advice: The goal for investors is to earn the highest interest rate possible without sacrificing any security.

Interest rates are particularly important in an economics sense.  If interest rates are high, it makes it more difficult for companies to borrow money and invest it in new factories and such.  As a result, the economy tends to contract when interest rates are rising.

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Gross Domestic Product
The GDP is another important figure that economists and investors look at. A strong GDP is good.

Inflation
Learn what inflation is and why it's bad for consumers and investors.

Related Books

A Random Walk Down Wall Street by Burton Malkiel
The Wealth of Nations by Adam Smith
The Rise and Decline of Nations By Mancur Olson
The Essential John Nash by John Nash

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