Question

During a recession, what must happen to interest rates to spur economic growth?

Answer 1

During a recession, what must happen to interest rates to spur economic growth? interest rates tend to fall during economic recession, not only because of the economic measures adopted by governments to try to make that happen, but also because supply and demand come into play, consumers and borrowers have the final voice, since they are the ones who establish how much they are willing to pay to request loans, without demand, the great offer would be null, to this we can add the efforts of the governments, through their federal banks to push the rates of interest down, offering future benefits to those who do as them.

Answer 2

Answer:

A. Drop

Explanation:

During a recession economic growth has declined. One way to spur growth, is to increase the money supply. When interest rates drop the money supply increases due to more spending and investment.