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| Topic: |
Business
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| Number of pages / Number of words: |
3 / 792 |
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Less income will mean less spending, a lower GDP, and a decrease in aggregate demand. Interest rates are important in two different ways. Since the Federal Reserve controls them, any changes reflect whether they feel the economy is strong or weak. They also influence people's likelihood to borrow money, which they will eventually spend...
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They also influence people's likelihood to borrow money, which they will eventually spend. Interest rates had been at record highs, but they have been lowered twice in the last month. This shows that not only are not enough people borrowing, but the Fed is worried about a decrease in aggregate demand...
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