Having negative real interest rates could stimulate the economy if, in response,
A)consumers saved more.
B)firms invested less.
C)consumers saved less.
D)firms borrowed less.

Question

Quizplus · Accepted Answer

When real interest rates are negative, the cost of borrowing is effectively lower than the inflation rate, encouraging consumers to save less and spend more, which can stimulate economic activity.

Having Negative Real Interest Rates Could Stimulate the Economy If