what happens to interest rates when the economy is booming? interest rates are the price of…

what happens to interest rates when the economy is booming? interest rates are the price of loans\nnothing\ndecreases\nincreases\nif government spent less than it took in in taxes the government would have\n1 point\ndeficit\nsurplus\nbalanced budget

what happens to interest rates when the economy is booming? interest rates are the price of loans\nnothing\ndecreases\nincreases\nif government spent less than it took in in taxes the government would have\n1 point\ndeficit\nsurplus\nbalanced budget

Answer

Brief Explanations:

When the economy is booming, there is more demand for loans for investment and consumption. With higher demand for loans (and assuming supply - side factors remain relatively constant), the price of loans (interest rates) increases. When government spending is less than tax revenue, the difference is a surplus as the government has extra funds left over after covering its expenditures.

Answer:

  1. C. increases
  2. B. surplus