How cutting interest rates would help current economic crisis ? ?

March 5th, 2009 | by admin |
if it’s to reduce the cost of borrowing, won’t that be harmful to lenders,banks for example

  1. 2 Responses to “How cutting interest rates would help current economic crisis ? ?”

  2. By SDD on Mar 8, 2009 | Reply

    It reduces the cost of borrowing.

  3. By Alby on Mar 8, 2009 | Reply

    It makes money cheaper…

    The cost of money is dictated by the interest rate assigned to that money. Reducing rates, lowers the cost of money, thus allowing more borrowing/leaning to occur. And getting money moving again is the goal.

    The downside is that it is inflationary. So you have to keep tabs on the CPI to determine if prices are rising. If yes, then rates will need to be jacked up.

Post a Comment