Question

The American economy is working like a low-interest credit card. Comment.

The American economy is working like a low-interest credit card. Comment.

Homework Answers

Answer #1

Answer: Federal reserve, America's Central bank, has kept the rates very low for a long period of time which has provided easy cash available to the market at very low rates.

Federal Reserve Control rates in the US market which in turn get reciprocated by banks in US (directly in contact with Customers) to provide loans at very cheap rates to people. As easy money will help people to start business, increase demand which will in turn generate jobs in the US economy.

This situation is like a credit card system only where you borrow money right now to pay later on Existing situation is like this only where money is available to borrow at low interest rates to keep supporting the economy of the US.

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