People would save more money.
lower interest rates
Low interest rates typically encourage borrowing and spending, leading to increased economic activity. However, one result that would not occur is a decrease in inflation; in fact, low interest rates often contribute to higher inflation as demand for goods and services rises. Additionally, low interest rates would unlikely lead to a significant increase in savings rates, as individuals may choose to spend rather than save when returns on savings are minimal.
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Unemployment would be reduced in the short run.
People would save more money.
people may be reluctant to borrow
Higher interest rates.
lower interest rates
lower interest rates
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Unemployment would be reduced in the short run.
the level of inflation begins to decline
What is beneficial about CD interest rates is that they are constant for the specified period of time. Sometimes interest rates can go up or down but CD interest rates would stay the same.
The tax advantages regarding interest rates is that there are tax deductions for the interests payable. This would translate to repayment of lower interest rates.
If banks had less money to loan they would increase their interest rates. This is because they would have to make the most profit off of the little money that they had to use. When banks have a lot of money to loan, interest rates are lower because they can still get a lot of interest even from the lower interest rates.
It could cause a kind of rubber-band effect on inflation. For instance, if the market is trying to keep interest rates high and the fed keeps dumping money into the market to try to keep interest rates low, one of these forces has to give. The market is going to be suddenly flushed with cash and risks an event that causes what would normally be a natural decrease in interest rates. This would cause a huge interest rate fluctuation and subsequent inflation.