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What are the relationships between interest rate and country's economy? Do you support high or low interest rate in the economy?

Economics Aug 07, 2020

What are the relationships between interest rate and country's economy? Do you support high or low interest rate in the economy?

Expert Solution

Interest rate and a country’s economy are inversely related. With a decrease in interest rates, people are able to borrow more money. So, they have more money with them and have more to spend. As they spend more, the economy grows. The opposite holds true for rising interest rate.
I support low interest rate in the economy because it encourages people to spend which increases the demand for goods and services. This is good for businesses, so there is rise in production and sales. This leads to more jobs and economic expansion.

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