Which factor is most likely to affect interest rate changes in the economy?

The factor that most directly influences interest rate changes in the economy is the supply and demand for loans. When the demand for loans is high and the supply is limited, interest rates tend to rise. Conversely, if the supply of loans increases or demand decreases, interest rates may fall. This relationship stems from the fundamental economic principle of supply and demand, which affects borrowing costs as lenders adjust rates based on the availability of funds and the level of demand from borrowers seeking loans.

The other factors listed, while they can have an indirect influence on interest rates, do not operate on the same foundational basis as supply and demand for loans. Global political stability may impact investor confidence and economic outlook but does not directly manipulate lending rates. Corporate earnings reports reflect a company's performance and can influence investment decisions, yet they are not a key driver for overall interest rate trends. Regulatory tax changes can affect business operations and economic growth, but their impact on interest rates is often less immediate than the direct relationship between loan supply and demand.