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Eva8 [605]
3 years ago
15

What does increasing interest rates do to the economy?

Social Studies
2 answers:
AnnZ [28]3 years ago
8 0

Answer:

Higher interest rates tend to moderate economic growth. Higher interest rates increase the cost of borrowing, reduce disposable income and therefore limit the growth in consumer spending. Higher interest rates tend to reduce inflationary pressures and cause an appreciation in the exchange rat

Explanation:

Vesnalui [34]3 years ago
4 0

Answer:

Higher interest rates tend to moderate economic growth. Higher interest rates increase the cost of borrowing, reduce disposable income and therefore limit the growth in consumer spending. Higher interest rates tend to reduce inflationary pressures and cause an appreciation in the exchange rate.

Explanation:

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