Question

Predict what will happen to interest rates and output if a stock market crash causes autonomous consumer expenditure to fall

Answer 1

Lower interest rates.

Step-by-step explanation:

if a stock market crashes, the interest rates will also be lowered because they have a direct relationship between stock market and interest rates. When the stock market performs very good, the interest rates will be higher while on the other hand, if a stock market crashes, the interest rates will be lower so we can conclude that the interest rates will be lower if stock market crashes.