As borrowing by consumers and businesses increases, interest rates are likely to decrease.

Question

Quizplus · Accepted Answer

When borrowing by consumers and businesses increases, it typically leads to an increase in demand for credit. This increased demand can put upward pressure on interest rates, as lenders seek to earn higher returns on their lending. Therefore, interest rates are more likely to increase, not decrease, when borrowing increases.

As Borrowing by Consumers and Businesses Increases, Interest Rates Are