Some of the economic conditions that can affect the cost of
money would include the following:
- Federal Reserve policies that is prevalent in the country.
- When there are budget deficits/surpluses in the budget that is
released by the government can impact the value of money.
- Level of business activity that is happening. If there is sound
business activity it can have a good money value when compared to
the currencies of other nation & vice versa.
- International trade deficits or surpluses: this refers to the
imports & export transactions that the nation deals with other
countries can also have an impact on the cost of money of the
respective nation.