According to Marx's interest rate theory, interest is a part of profit and a transformation form of surplus value, so interest must first be restricted by average profit.
Generally speaking, the average profit rate is the highest limit of interest. As the price of capital, interest rate, like ordinary commodities, is determined and influenced by the supply and demand of money.
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Economists have been trying to find a set of theories that can fully explain the structure and changes of interest rates. Interest rates are usually controlled by the national central bank and managed by the US Federal Reserve. So far, all countries regard interest rate as one of the important tools of macro-control.
Interest rates in different countries have different connotations. In China, interest rate usually refers to the bank interest rate, and further refers to the benchmark deposit and loan interest rate stipulated by the People's Bank of China.
In the United States, it mainly refers to the bond market interest rate. The so-called benchmark interest rate adjusted by the Federal Reserve is not a mandatory administrative benchmark interest rate, but an overnight lending rate determined by open market operations.
In reality, the effective capital interest rate can fluctuate around the benchmark interest rate. Raising or lowering the benchmark interest rate is just a signal sent by the Federal Reserve to the market. As for the deposit and loan interest rate, it is a market-oriented interest rate, which is not necessarily related to the benchmark interest rate. Whether to raise the deposit and loan interest rate is a matter for commercial banks.
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