In which of the following situations would a reserve bank be most likely to lower interest rates?

Question

Quizplus · Accepted Answer

Reserve banks typically lower interest rates in order to stimulate economic growth. In a situation where the economy is growing slowly or not at all, lower interest rates can encourage borrowing and spending, which in turn can increase economic activity. The other three options do not necessarily indicate a need for lower interest rates - high savings could be addressed through alternative policies such as tax incentives, low investment may be due to market or industry-specific factors, and rising inflation may require tighter monetary policy rather than looser.

In Which of the Following Situations Would a Reserve Bank