To jump-start the economy, the Fed is likely to lower interest rates, in order to encourage individuals and businesses to spend money.

Question

Quizplus · Accepted Answer

The Fed meets once each month to review economic growth and make decisions with respect to raising or lowering interest rates. If the Fed lowers interest rates, it is trying to encourage individuals and businesses to borrow more money and spend it in ways that improve their quality of life, as well as increase the GDP. If the Fed raises interest rates, it is trying to discourage individuals and businesses from borrowing money, so as to slow down the economy.

To Jump-Start the Economy, the Fed Is Likely to Lower