a.
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Mathematics, 07.10.2019 06:30 Legoman29305
Why do interest rates on loans tend to be lower in a weak economy than in a strong one?
a.
a weak economy tends to have low inflation, so interest rates drop to match.
b.
borrowers in a weak economy are less likely to default on their loans, so interest rates are correspondingly low.
c.
in a weak economy there is less demand for credit, so the price drops.
d.
the strength or weakness of an economy is determined by interest rates; low interest rates actually cause a weak economy.
b is wrong
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Why do interest rates on loans tend to be lower in a weak economy than in a strong one?
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