When business firms become more pessimistic about the state of the economy, the interest rate ______ and borrowing ______.

Name: When business firms become more pessimistic about the state of the economy, the interest rate ______ and borrowing ______.
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When business firms become more pessimistic about the state of the economy, they are less likely to borrow money to invest in new projects. This decrease in demand for borrowing leads to a decrease in interest rates.

When Business Firms Become More Pessimistic About the State of the Economy