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ajpheif16

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tT
发表于 2013-3-31 17:39 | 只看该作者

Econ Recessionary Phase

boost, interest, possibly, people
Why would the interest rate in recessionary phase be high ? wouldn’t they want to lower the interest rate so they could encourage more borrowing? So people can spend more and possibly boost up the economy ?

 

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pawn

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发表于 2013-3-31 17:39 | 只看该作者
High interest rates reduce consumer and investment expenditure which in turn reduces aggregate demand. This is what causes the recessionary gap.

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