decreased interest rates to reverse the trend of inflation (too much money) would impact consumer spending by?
Question by Sabrina: decreased interest rates to reverse the trend of inflation (too much money) would impact consumer spending by?
making them spend less or more money?
also, how would it impact business spending?
Best answer:
Answer by always under siege
Decreased interest rates would encourage consumers to spend more money.
Business expenditures aren’t swayed as much by interest rates as they are normally consistent.
Add your own answer in the comments!
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Decreasing interest rates would only encourage borrowers to borrow more money, not necessarily making consumers spend more. Look at where interest rates are today, and at the same time consumer confidence (spending) is down.
Businesses would do the same thing, borrow more money for the business.