Economic Climate Flashcards
1
Q
What does high interest rates do to the economy
A
They decrease spending and increase saving
2
Q
What does low interest rates do to the economy
A
Higher spending and less saving
3
Q
Why does the Government decrease interest rates?
A
So customers buy more luxary items and more money is in circulation
4
Q
Why does the Government increase Interest rates?
A
To keep inflation from getting too high
5
Q
3 examples of products people usually buy with borrowed money
A
A mobile phone
House
Car
6
Q
Name 2 types of Loans
A
Student Loan
Mortgage
