In this article will discuss how and why the interest rate influence on the business world, business decisions and business tycoons and what is the interest role in The CEO Game. The business world is greatly depended on the interest rate, so why is that?
For start we have to understand what the hell an interest rate is.
Interest Rate.
The interest rate is a tool in the hands of the main bank (in most countries). This tool defines the rate of interest one will receive from the main bank if one invests in the main bank. This tool helps the main bank to control how much money will be in the banks and how much money will circulate in the market for the use of investment or consumption. Since the money is invested in the main bank, which is in the end a government agency, than the chances for receiving the promised interest are considered “safe”. Using this tool the main bank can control the circulation of investments since high interest rates offers investors a “safe” investment and low interest rate encourage them to invest in the market. The reason I use quotation marks around the word safe is because the main banks interest rate are a safest since a country can’t go bankrupt because it can always print more money.
So the next common question is why doesn’t the government always print more money? Well the answer for that question is quite simple and it is in one word “inflation”. Inflation means that the value of the local currency will be weakened comparing to other currencies or goods.
After we understood the definition of interest rates we can now start to grasp the influence of interest rates on every aspect of our modern business world. Most of the companies in the modern world invest their money in different kinds of investments (stocks, bonds, currencies and other goods) and since every investment has its own risk, than companies always find themselves jumping from one type of investment to the other.
In the CEO Game as the CEO you will have to lead your company in the financial world. Knowing where to invest your company’s money can be difference between being the local burger place or the next business tycoon. Inside the CEO game we implemented many of the common financial tools to allow you to act in the closest business simulation to reality as possible.
Omri.
The CEO Game.
