Question

Lowering the discount rate can promote full employment because

Answer 1

Answer:

Companies will likely have more resources to expand which will definitely create opportunity for recruiting more workers.

Explanation:

Governments set a minimum interest rate on any loans that will be given out. This interest rate is known as the discount rate.

So, when the initial interest rate set on the loans acquired by companies is being reduced, this will allow the companies involved to have resources to fully or permanently appoint workers that are initially on contract appointment and, even hire more people, thereby reducing the rate of unemployment.