21. which of the following explains what would happen if a financial institution lowered interest rates…

21. which of the following explains what would happen if a financial institution lowered interest rates? businesses would borrow from foreign banks. businesses would borrow more. businesses would borrow less. business would borrow the same amount. clear all

21. which of the following explains what would happen if a financial institution lowered interest rates? businesses would borrow from foreign banks. businesses would borrow more. businesses would borrow less. business would borrow the same amount. clear all

Answer

Brief Explanations:

When interest rates are lowered by a financial institution, the cost of borrowing decreases. This makes borrowing more attractive for businesses, so they are likely to borrow more to invest in expansion, new projects etc.

Answer:

Businesses would borrow more.