Establishment of new government regulations that reduce corruption and instill confidence in firms and entrepreneurs tends to lead to higher interest rates.

Question

Quizplus · Accepted Answer

Establishment of new government regulations that reduce corruption and instill confidence in firms and entrepreneurs tends to lead to higher interest rates because it reduces the risk associated with lending, making it more attractive for lenders to provide loans and thus increasing the demand for loanable funds, which in turn leads to higher interest rates.

Establishment of New Government Regulations That Reduce Corruption and Instill