The Banking System would not want interest rates to remain at 0% including the fact that doing so would restrict its flexibility to implement expansionary monetary policy in the event of the next recession.
What does the term interest mean?
The fee you paid to borrow more money or the fee you demand to lend money is called interest. Interest is often expressed as an annual percentage of the borrowed amount. The rate of return on the loan is known as this percentage.
What is an example of interest?
Consider borrowing $1,000 at a 10percent annual interest rate for seven years. Your interest for the first year would be $100. Your interest payment for the next year would be made up of the principle amount plus interest, or $1,100. As a result, your interest for the next year would be $110 ($1,100 multiplied by 0.10).
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