When interest rates are lower, consumers and companies are able to borrow money cheaply in order to make major purchases. As a result, the demand for goods in an economy will generally
A) decrease.
B) increase.
C) remain the same.
D) be minimally affected.

Question

Quizplus · Accepted Answer

When interest rates are lower, it becomes more affordable for consumers and companies to take out loans to make purchases. This increased affordability leads to higher demand for goods and services in an economy, as there is more spending power available. Therefore, the demand for goods in an economy will generally increase when interest rates are lower.

When Interest Rates Are Lower, Consumers and Companies Are Able