Question

Why do interest rates on loans tend to be higher in a strong economy than in a weak one?

Answer 1

the answer is A.

 Credit markets increase in a strong economy, and with increased demand come increased prices.

Answer 2

A strong economy can be defined as an economy which has a strong industrial base, good shares prices, vast industrialization, high GDP etc.

A strong economy has high credit rates because when the demand is high, the prices are high. When the demand is less, the prices are less.

So, option A: credit markets increase in a strong economy, and with increased demand come increased prices. - is the correct answer.