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Corporations are more incentivized to borrow money when interest rates are low because it reduces the cost of borrowing. This means that they can invest in more projects or expand their operations with less financial burden. The lower interest rates make the borrowed money cheaper, thus encouraging more borrowing for investment purposes.
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The Federal Reserve was created to help control inflation and deflation in the economy. It does this by regulating the interest rates of borrowed money, which alters the amount of capital that flows throughout the economy. Economic growth is stimulated when interest rates are lowered because corporations are more incentivized to borrow money for investment purposes when the money is cheaper. Alternatively, when prices rise too high, too fast, The Fed will raise interest rates to offset borrowing and slow the rising inflation costs.
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Economics can be intimidating to the person who is not well-versed in business and mathematics. This book caters to the “layman” by breaking down the...
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