During recessions,interest rates tend to fall because
A)consumers attempt to borrow money to make up for their falling income.
B)business borrowing for investment purposes tends to fall during recessions.
C)lower real resource prices create profit opportunities for banks.
D)recessions shift the economy's long-run aggregate supply curve to the left.

Question

Quizplus · Accepted Answer

During recessions, businesses often reduce borrowing for investment due to decreased demand and uncertainty, leading to lower interest rates as the demand for loans decreases.

During Recessions,interest Rates Tend to Fall Because