Question

If there is a fall in the interest rate, _________.

A. the unemployment rate will most likely rise
B. there will be a downturn in the economy
C. consumers will be less likely to buy more expensive items
D. businesses will be more likely to expand their facilities

Answer 1

c

Answer 2

actually d

Answer 3

c or d im not sure sorry

Answer 4

Having low interest rates as we have means the money supply in the economy is increased (as people have more available income) thereby allowing people to spend more which thus should have the impact of increasing demand. This in turn may mean the production of goods and services are also increased and the effect of this may be to employ more people (reduce unemployment). Also, when the interest rate is low people who want to loan money can easily do it since they don't have to pay much extra.