Lower interest rates
A)increase the quantity of goods and services demanded because they decrease the cost of borrowing money.
B)increase the quantity of goods and services demanded because they increase the income of bankers and other creditors.
C)decrease the quantity of goods and services demanded because they decrease the incomes of all people in the economy.
D)decrease the quantity of goods and services demanded because they raise the costs of building new plants and equipment.

Question

Quizplus · Accepted Answer

Lower interest rates decrease the cost of borrowing, which encourages investment and consumption by making it cheaper to borrow money to finance these activities. This, in turn, leads to an increase in the quantity of goods and services demanded.

Lower Interest Rates