The lower interest rates:
A)stimulate investment and consumer durable demand and this increases aggregate demand.
B)discourage investment and consumer durable demand and this increases aggregate demand.
C)stimulate investment and consumer durable demand and this decreases aggregate demand.
D)discourage investment and consumer durable demand and this decreases aggregate demand.

Question

Quizplus · Accepted Answer

Lower interest rates make it cheaper for businesses and consumers to borrow money, which stimulates investment and consumer spending. This, in turn, increases aggregate demand, as businesses produce more goods and services to keep up with demand.

The Lower Interest Rates