When the real interest rate is low,there are greater incentives to borrow and fewer incentives to lend.

Question

Quizplus · Accepted Answer

When the real interest rate is low, the cost of borrowing decreases, making it more attractive for borrowers to take out loans. Conversely, the return on lending or saving money is lower, which reduces incentives to lend. Therefore, people tend to borrow more and save less when interest rates are low.

When the Real Interest Rate Is Low,there Are Greater Incentives