cruz1964 cruz1964
  • 27-01-2020
  • Mathematics
contestada

Why do intrest rates on loans tend to be lower in a week economy than in a strong one?

Respuesta :

agboanthony124
agboanthony124 agboanthony124
  • 28-01-2020

Answer:

Interest rate tend to be lower in weak economy than in strong economy to encourage people to borrow money to invest in businesses, the lower the interest rate, the more willing people are to borrow money to make big purchases and this will make economic growth tend to be faster.

Moreso a weak economy tends to have low inflation, so interest rates drop to match.

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