Question

It becomes easier for businesses to borrow money when

Answer 1

It becomes easier for businesses to borrow money when the federal reserve increases money supply. Money supply is the quantity of currency and other liquid instruments that are circulating in a nation's economy at a particular time. The central bank of a country can increase the money supply by purchasing government securities on the open market, thereby increasing available funds to private banks. Private banks are thus empowered to lend money to businesses.