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Governments decreases interest rates so that, when interest rates are lowered, borrowings will be more cheaper, which would encourage investors borrow more money. This would increase investments in an economy, which would thereby increase production, demand for labor and thereby the average salary, which consequently leads to economic growth.
What else can I help you with?
What will happen to Canadian interest rates?
Canadian interest rates may be lowered to encourage people to borrow more money and invest. Low interest rates can foster business activity if an economy is experiencing less productivity.
What would most likely happen if the federal reserve system lowered interest rates?
Unemployment would be reduced in the short run.
What would happen if aliens took over the earth?
They would have to deal with the economy instead of the current government.
What is the economic policy of laissez - faire?
Laissez -faire is a French term that means the avoidance of government control of the business and of the economy. This idea has been replaced with the term "free markets" which understands that government regulations on business to a certain extent are necessary for a wealthy and fair economy. The US economy can be described as a free market economy.
What can happen in a planned economy that does not happen in a market economy?
nothing much happens ...
What will happen when carbon dioxide is introduced into deionized water?
the pH of the water is lowered
What might happen in an economy if a government increases income tax rates?
There will be less money for citizens to spend/save and the economy will slow/shrink. Also more citizens will seek ways to avoid paying taxes.
What will happen to the melting point of ice if some common salt is added to it?
The melting point is lowered.
What would happen to the economy of field mice if they became extinct?
Field mice do not have an "economy". An "economy" is a human invention.
What happen to the freezing point when a non volatile solute added to a volatile liquid?
The frezzing point is lowered.
What will happen if the government decreases spending and everything else remains constant?
If the government decreases spending and everything else remains constant, there will be a decrease in aggregate demand, leading to a slowdown of economic growth or even leading to a contraction of the economy.
What is going to happen with this economy?
the united states economy is in a deppression but it will recover over time
