A. discourage corporate investments
B. discourage individuals from saving
C. encourage corporate expansion
D. encourage corporate borrowing
✅ The correct answer is option A.
Increasing interest rates discourage corporate investments. Higher interest rates tend to moderate economic growth. They increase the cost of borrowing, reduce disposable income and therefore limit the growth in consumer spending. Higher interest rates tend to reduce the rate of economic growth and inflationary pressures.
Increasing interest rates discourage corporate investments. Higher interest rates tend to moderate economic growth. They increase the cost of borrowing, reduce disposable income and therefore limit the growth in consumer spending. Higher interest rates tend to reduce the rate of economic growth and inflationary pressures.