... the quantity of funds and the rise and fall of interest rates, in turn, affect the condition of the economy the Gross National Product, the employment of resources, the level of income and the ... businesses to trim their demands for credit or to postponefinancing their spending plans until the economy improves. The net effect of these changes in the demand for and the supply of funds ... interestactually earned on the loan is $75, not $100. In other words, the lender keeps only 75% of the interest. With taxes, then, the lender's net yield is reduced to 7.5%.Unlike the interest investors...