When interest rates increase this is: a. Bad for lenders and borrowers (incorrect) b. Good for lenders but bad for borrowers c. Good for borrowers but bad for lenders d. Good for lenders and borrowers...
When interest rates increase this is:
a. Bad for lenders and borrowers (incorrect)
b. Good for lenders but bad for borrowers
c. Good for borrowers but bad for lenders
d. Good for lenders and borrowers
Homework Answers
Answer : The answer is option b.
When interest rate increase then people have to pay high interest on borrowing which increase the cost of borrowing. So, higher interest rate is bad for borrowers. But at higher interest rate lenders get more interest income by lending money. So, higher interest rate is good for lenders. Therefore, option b is correct.
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