What is the most harmful consequence to GDP from interest rate ceilings?
A) Lenders cannot earn a normal market return.
B) Investment falls,dragging down GDP and future growth.
C) Consumption increases and savings get too high.
D) A surplus of savings occurs.

Question

Quizplus · Accepted Answer

Interest rate ceilings can cause lenders to limit their lending activities or seek other options, which can reduce investment in the economy. This reduction in investment can lead to a decline in GDP, and also negatively impact future economic growth.

What Is the Most Harmful Consequence to GDP from Interest