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Anton [14]
3 years ago
14

When interests rates are low, spending decreases. Please select the best answer from the choices provided T F

History
2 answers:
sashaice [31]3 years ago
8 0
The best and the most correct answer among the choices provided by the question is the first choice. The statement "<span>When interests rates are low, spending decreases" is True. </span>I hope my answer has come to your help. God bless and have a nice day ahead!
tia_tia [17]3 years ago
8 0

The correct answer is False.

When the money supply increases it lowers the interest rates, which stimulate investments. Lower interest rates reduce the cost when someone borrows money. This motivates people to purchase goods and services because they trust the market. In the case of the corporations, the companies see this as a good moment to invest their money in new projects.  

<em>So, the statement “when interest rates are low, spending decreases” is </em><u><em>False. </em></u><em> </em>


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Wall Street bankers bought stocks, so only 2% was lost by the time the market closed.

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Nov. 23: The stock market hit bottom and began trading sideways.

December: The unemployment rate was still just 3.2%. Since unemployment is a lagging indicator, it hadn't started to worsen yet.

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As the value of the dollar rose, prices fell, which reduced revenue for businesses. It also meant that debt cost more for lenders to pay back.

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Nov. 7: The Bank of Tennessee failed. That led to failures of affiliate banks in the next few days. Although the economy was improving, weaknesses in the banking system pulled it back down.

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Worried about budget deficits, Hoover returned the top income tax rate to 25%. The economy shrank 8.5%.

The unemployment rate rose to 8.7%. Deflation set in as prices fell 6.4%.

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