In three to four sentences, explain the effects of lower interest rates on consumption and investments.

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Nevin

30 July, 09:34

In three to four sentences, explain the effects of lower interest rates on consumption and investments.

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Maryjane Burke · Answer 1

If the interest rates of for example bank loans are lowered compared to how much they are now, many will opt to borrow money for investment. The availability of the goods and services will then lead to increase in consumer's consumption.