Question

Explain whether the Federal Reserve reducing interest rates helps to expand economic growth. (1 point) Responses

1. Reducing interest rates does not help the economy expand because prices of goods and services decrease from reduced demand.
2. Reducing interest rates does not help the economy expand because businesses save instead of spend with low-interest rates, slowing economic growth.
3. Reducing interest rates helps the economy expand because it lowers the cost of borrowing for business to expand, leading to more jobs and economic growth.
4. Reducing interest rates helps the economy expand because businesses earn a greater return on their savings, leading to additional spending and economic growth.

Answer 1

Answer:Lowering rates makes borrowing money cheaper. This encourages consumer and business spending and investment and can boost asset prices. Lowering rates, however, can also lead to problems such as inflation and liquidity traps, which undermine the effectiveness of low rates.

Explanation:

Answer 2

1. A sole proprietorship is distinguished by the fact that it has

Answer - only one owner.

2. James would like to create a sole proprietorship operating under the name Super Lawn Care. Which of the following is true?

Answer - James will need to register the business with his local state as the name of his business differs from his own.

3. A recent high school graduate would like to establish an online tutoring service as a sole proprietorship operating under her own name. Having never worked before and having no current income, which of the following hurdles is she likely to face?

Answer - It will be difficult to cover start-up costs since banks will be unlikely to loan her money.

4. What is a subsidy?

Answer - a government payment to a business to generate employment and economic growth

5. Explain whether the Federal Reserve reducing interest rates helps to expand economic growth.

Answer - Reducing interest rates helps the economy expand because it lowers the cost of borrowing for business to expand, leading to more jobs and economic growth.

Step-by-step explanation: I just took the test and got it right