Lowering the __________ reduces the cost of money,which makes borrowing easier,which increases spending,and thereby affects economic growth.

Question

Quizplus · Accepted Answer

Lowering the interest rate reduces the cost of borrowing money, which in turn encourages people to borrow more and spend more, leading to increased economic growth. Conversely, an increase in interest rates will have the opposite effect, as it makes borrowing more expensive and decreases spending. The other options (deficit, national debt, and personal income tax rate) may have an indirect impact on economic growth, but are not directly related to the cost of borrowing money.

Lowering the __________ Reduces the Cost of Money,which Makes Borrowing