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
It helps strengthen the economy since loans and credit cards are cheaper and spending money is easier.
When a central bank lowers interest rates, borrowing becomes less expensive. This encourages consumers and businesses to take out loans, leading to increased spending and investment. As people spend more money, it can stimulate economic growth. Additionally, lower interest rates can lead to increased consumption as credit becomes more affordable.