Explain why taking interest rate down to zero

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Reference no: EM131096454

What is interested and why do we have it?

Explain why taking interest rate down to zero, i.e., no interest rate, may stoke inflation, and hence, removing the purchasing power of money and ruining the economy down the road. Thinking through these questions will help you understand why interest is the remedy for, and not the cause of, inflation. Be sure to examine the impacts that a low or zero interest rate may have on Consumption Spending (C), Investment Spending (Ig), and Net Exports (NX).

Reference no: EM131096454

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