Fighting recession with low interest rates is technically impossible when a country has large trade deficits and huge national debt.

Question

Quizplus · Accepted Answer

Lowering interest rates may spur borrowing and spending, but it also devalues a country's currency, which can lead to higher inflation and make imports more expensive. This can worsen trade deficits and compound the burden of a high national debt. Therefore, relying solely on low interest rates to combat a recession is not feasible when a country has significant trade deficits and debt.

Fighting Recession with Low Interest Rates Is Technically Impossible When