Question

Interest rates in the Eurozone are very low; consumers and firms find it easy to borrow money to spend or invest.

a. Interest rates in the Eurozone are prohibitively high
b. Borrowing money is difficult in the Eurozone
c. Low interest rates in the Eurozone facilitate easy borrowing for spending or investment
d. Consumers and firms do not find it easy to borrow money in the Eurozone

Answer 1

c) Low interest rates in the Eurozone facilitate easy borrowing for spending or investment.

Step-by-step explanation:

Low interest rates in the Eurozone facilitate easy borrowing for spending or investment. When interest rates are low, consumers and firms find it easier to borrow money because it is more affordable and less costly to repay. This encourages spending and investment, which can stimulate economic growth.

For example, businesses may borrow money to invest in new equipment or expand their operations, while consumers may borrow money to purchase houses or cars. The availability of easy borrowing can increase business investment and consumer spending, leading to increased aggregate demand and overall economic activity.