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Impact of Recession: Interest Rates

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Explain why interest rates tend to decrease during recessionary periods. Review historical interest rates to determine how they reacted to recessionary periods.

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Solution Summary

This solution explains why interest rates tend to decrease during recessionary periods. Additionally, the solution reviews the most recent recession and discusses how the interest rates reacted during this period.

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During times of recessionary periods, interest rates tend to decrease to stimulate recovery within the economy. Note that on the contrary, high interest rates basically curb inflation, but also slow down the economy since the general cost of living becomes expensive. While low ...

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