A low interest rate encourages people to borrow because it reduces the cost of borrowing money. When interest rates are low, the amount you pay in interest on loans (like mortgages or personal loans) is less, making borrowing more attractive. Consequently, the opportunity cost of borrowing is lower compared to saving.
On the other hand, low interest rates generally discourage saving, as the rewards for saving (interest earned on savings accounts) are also low.
Therefore, the correct response is:
A low interest rate encourages people to borrow because interest rates are paid to savers by borrowers, so a low interest rate means a low opportunity cost for borrowing.