In 1 or 2 sentences, explain the effects of lower interest rates on consumption and investments.

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asked Oct 2, 2018 158k views

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Tarsis Azevedo · Answer 1 · 2018-10-07T05:56:31+0000

Lower interest rates make it cheaper to borrow. This tends to encourage spending and investment. This leads to higher aggregate demand and economic growth. This increase in aggregate demand may also cause inflationary pressures.

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In 1 or 2 sentences, explain the effects of lower interest rates on consumption and investments.

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