ECS 3701 ASSIGNMENT 1

1.01 When interest rates [1] decrease, businesses will decrease their investment spending. [2] increase, savers are worse off. [3] increase, borrowers benefit. [4] decrease, the cost of financing a house is lower. Due to a decrease in interest rates, consumers would be more likely to purchase a house or a car because the cost of financing their purchase is lower (as higher rates could deter one from borrowing to buy a house or car). On the contrary, higher interest rates could encourage ...