When interest rates are low, borrowing ____________.
a.
decreases
b.
increases
c.
stays almost the same as when rates are high
d.
decreases and then increases
Please select the best answer from the choices provided
Low interest rate environments are meant to stimulate economic growth by making it cheaper to borrow money to finance investment in both physical and financial assets.
Low interest rates mean more spending money in consumers' pockets. That also means they may be willing to make larger purchases and will borrow more, which spurs demand for household goods. This is an added benefit to financial institutions because banks are able to lend more.
