Holding all else constant,lower real interest rates promote ________ spending in the economy and result in ________ inflation.
A) less;lower
B) less;higher
C) more;higher
D) more;lower
E) no change in;lower

Question

Quizplus · Accepted Answer

Lower real interest rates reduce the cost of borrowing, encouraging more spending and investment, which can lead to higher demand and thus higher inflation.

Holding All Else Constant,lower Real Interest Rates Promote ________ Spending