federal simulation\nstudents act as the federal reserve and decide whether to raise/lower rates in…
federal simulation\nstudents act as the federal reserve and decide whether to raise/lower rates in scenarios\nfed chairman simulator\nwhat happens when you increase interest?\nwhat happens when you decrease interest?
Answer
Brief Explanations:
When interest rates increase, borrowing becomes more expensive, which can lead to reduced consumer spending and business investment, potentially slowing economic growth and reducing inflationary pressures. When interest rates decrease, borrowing is cheaper, encouraging more consumer spending and business investment, which can stimulate economic growth but may also increase the risk of inflation.
Answer:
When you increase interest: Borrowing becomes more expensive, potentially slowing economic growth and reducing inflation. When you decrease interest: Borrowing becomes cheaper, potentially stimulating economic growth and increasing inflation - risk.