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Review the chart.
An arrow goes from the fed causes interest rates to go down to banks charge less interest on loans. 3 arrows go from banks charge less interest on loans to people borrow more, economy grows, and question mark.
Which idea would best fit in the third oval?
People Spend Less
Inflation Decreases
Money Supply Decreases
Businesses Create Jobs
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GPT-5 mini
AI
"Businesses Create Jobs."
Lower interest rates make borrowing cheaper, so people and firms borrow and spend/invest more. That boosts demand and business activity, causing firms to expand and hire. (The other options are inconsistent: lower rates generally raise — not lower — inflation and money supply, and they don't cause people to spend less.)
Lower interest rates make borrowing cheaper, so people and firms borrow and spend/invest more. That boosts demand and business activity, causing firms to expand and hire. (The other options are inconsistent: lower rates generally raise — not lower — inflation and money supply, and they don't cause people to spend less.)
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