If the Fed lowers the interest rate, then
A)net exports will increase.
B)only investment decreases.
C)consumption expenditure decreases and investment increases.
D)both consumption expenditure and investment decrease.
E)only consumption expenditure decreases.

Question

Quizplus · Accepted Answer

Lowering interest rates typically makes borrowing cheaper, encouraging spending and investment, which can lead to an increase in net exports due to a weaker currency.

If the Fed Lowers the Interest Rate, Then