A decrease in interest rates benefits the economy in several ways:
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Increased Borrowing: Lower interest rates make loans cheaper for consumers and businesses, encouraging them to borrow more for big purchases (like homes and cars) and investments in expansion.
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Stimulated Spending: With reduced borrowing costs, individuals have more disposable income, which can lead to increased consumer spending, driving demand for goods and services and boosting economic growth.
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Enhanced Business Investment: Businesses can finance expansion projects at a lower cost, leading to increased capital investments, which can create jobs and enhance productivity in the economy.
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