What happens to borrowing when interest rates rise?
A) It increases.
B) It decreases.
C) It can increase or decrease.
D) Borrowing decisions are independent of interest rates.

Question

Quizplus · Accepted Answer

When interest rates rise, borrowing becomes more expensive, which can decrease the demand for borrowing. Higher interest rates can discourage individuals and businesses from taking on new debt, which leads to a decreased borrowing rate.

What Happens to Borrowing When Interest Rates Rise