Cutting inflation and lowering interest rates on loans can easily be done at the same time.

Question

Quizplus · Accepted Answer

Cutting inflation and lowering interest rates on loans often involve conflicting monetary policies. Cutting inflation requires higher interest rates to reduce demand and cool down the economy, which can make loans more expensive. Lowering interest rates on loans stimulates demand and encourages borrowing, which can fuel inflation. Therefore, it is difficult to achieve both simultaneously.

Cutting Inflation and Lowering Interest Rates on Loans Can Easily