Question

why does lowering interest rates help the economy? (1 point) all actions by the fed help the economy. low rates are not usually followed by raising rates. more people borrow when rates are low, so more money is spent. interest rates are similar to exchange rates for international currency.

Explanation:

When interest rates are low, borrowing money becomes cheaper. This encourages more people and businesses to take loans. With more loans, there is more money available for spending on goods, services, investments etc. which in turn boosts economic activity. The first option is too broad (not all Fed actions always help), the second option about rate - follow - up is not relevant to the core reason of how low rates help the economy, and the fourth option about similarity to exchange rates is not the main reason for economic boost from low interest rates.

Answer:

More people borrow when rates are low, so more money is spent.