Sarah owns a hair styling salon.She needs to update her shop with new customer chairs and work stations.If the Fed were to lower interest rates by 1.5 percentage points,at the same time that the government increased the tax rate by 1.5%,she could immediately determine that updating her shop would not increase or decrease her financial position.
FALSE

Question

Quizplus · Accepted Answer

Lowering interest rates would make it easier for Sarah to obtain a loan for updating her shop, but increasing tax rates would decrease her profits, making it harder for her to pay off the loan. Therefore, her financial position would be affected, and her decision to update her shop would require careful consideration.

Sarah Owns a Hair Styling Salon