Floating rates do not work well during recessions

Name: Floating rates do not work well during recessions
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This is because during a recession, demand and economic activity decreases, causing interest rates to drop. However, if interest rates are floating, they may not drop enough to stimulate borrowing and spending, leading to further economic contraction. Fixed interest rates can provide more stability and certainty during a recession.

Floating Rates Do Not Work Well During Recessions