How do interest rates influence economic growth?

 Interest rates influence economic growth by affecting borrowing, spending, and investment:

• Lower interest rates → cheaper loans → more borrowing and spending by consumers and businesses → boosts economic growth.
• Higher interest rates → more expensive loans → less borrowing and spending → slows down economic growth.

In short:

✅ Low rates = stimulate growth

❌ High rates = slow growth

Central banks adjust interest rates to manage inflation and stabilize the economy