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Fall in the interest rates is a typical feature of
- a)recovery
- b)boom
- c)depression
- d)contraction
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
Fall in the interest rates is a typical feature ofa)recoveryb)boomc)de...
Explanation:
- Fall in interest rates is a typical feature of depression.
- Depression is a phase of the business cycle that occurs after the peak and before the trough.
- In this phase, economic activity is at its lowest, with high unemployment and reduced consumer spending.
- Central banks reduce interest rates to encourage borrowing and spending, which can help stimulate economic growth.
- Lower interest rates can also make it easier for businesses to borrow and invest in new projects, which can lead to job creation and economic expansion.
- However, in a depression, even with low interest rates, there may be little demand for borrowing and investment due to the overall economic weakness.
- Overall, the fall in interest rates is a response to the economic conditions of a depression and is one tool used to try to stimulate growth and recovery.
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Fall in the interest rates is a typical feature ofa)recoveryb)boomc)de...
With lower interest rate, people's demand for holding liquid money increases. Despite lower interest rates, demand for credit declines because investor confidence has fallen.
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Fall in the interest rates is a typical feature ofa)recoveryb)boomc)depressiond)contractionCorrect answer is option 'C'. Can you explain this answer?
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