Question

the gdp of a country hasn’t improved in the past three years. the central bank decided to take a measure that will increase the amount of money people spend on goods and services. which step should the central bank take? increase interest rates reduce interest rates increase taxes increase the required reserve ratio increase the price of goods and services

Answer 1

reduce interest rates

Answer 2

Generally, the Central Bank will reduce the interest rate to allow banks to lend money at a lower rate, thus infusing the macro-economy with funding on medium to large ticket items.