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When Interest Rates Come Down

Question 52

Multiple Choice

When interest rates come down,


A) people on average are better off since borrowing is now less expensive.
B) people on average are worse off since the income of lenders will now decrease.
C) social welfare is left unchanged since what borrowers gain is exactly offset by what lenders lose.
D) people on average may or may not be better off,depending on how high the rate was to begin with.

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