First, what interest rates are we talking about and why is it important to both the economy and business decisions?

There is an old saying that money makes the world go around. In economic parlance this is not quite correct. Actually, it is the cost of money that makes the world go around, and this cost of money is reflected in the level of interest rates. As the level of interest rates rise, businesspeople and investors demand a higher rate-of-return on their capital investment to justify the expenditure. The result is similar to