How does lowering interest rates by a government’s central bank affect the economy?
It makes the economy weaker since it makes loans and credit cards more expensive and increases inflation
It helps strengthen the economy since it doesn’t change the way people spend money
It helps strengthen the economy since loans and credit cards are cheaper and spending money is easier
It helps make the economy weaker since loans and credit cards are cheaper and spending money is more difficult
The correct answer is: It helps strengthen the economy since loans and credit cards are cheaper and spending money is easier.
Explanation: When a central bank lowers interest rates, it reduces the cost of borrowing. This means that loans for homes, cars, and credit cards become cheaper. When borrowing costs are lower, consumers and businesses are more likely to spend and invest. This increased spending can stimulate economic growth and boost overall economic activity.