Question

Which of the following is true about interest rates?

a) High-interest rates encourage borrowing
b) Interest rates have no impact on the economy
c) Low-interest rates can stimulate economic growth
d) Interest rates only affect inflation

Answer 1

Low-interest rates can stimulate economic growth.

Step-by-step explanation:

According to the information given, the correct answer is c) Low-interest rates can stimulate economic growth. When interest rates are low, it becomes cheaper for businesses and individuals to borrow money for investment and consumption purposes. This stimulates economic activity, as more money is injected into the economy and people are encouraged to spend and invest.