The rationale for interest rates determining AD is with lower interest rates
A)firms will borrow more to invest.
B)consumers will borrow less to buy durables.
C)consumers will borrow more to buy durables.
D)firms will borrow more to invest and consumers will borrow more to buy durables.

Question

Quizplus · Accepted Answer

Lower interest rates reduce the cost of borrowing, encouraging both firms to invest more in their operations and consumers to take out loans for large purchases, thus increasing aggregate demand.

The Rationale for Interest Rates Determining AD Is with Lower