Low-Paid Worker Wages and Economic Impact
Question
Analyse how a cut in the interest rate could reduce poverty.
Category:
Interest Rates
Frequently asked question
Preview Answer
I. 🍃Introduction
- Brief overview of the coherent analysis
II. Cost of borrowing will fall / reward from saving will decline
- Explanation of how this will increase borrowing
- Discussion of the potential increase in demand for loans
III. Consumer spending will increase
- Explanation of how increased borrowing will lead to increased consumer spending
- Discussion of the potential impact on firms investing more
IV. Employment may increase
- Explanation of how increased output may lead to more job opportunities
- Discussion of the potential impact on incomes rising
V. Reduction in poverty
- Explanation of how the poor who have borrowed in the past may have more money to spend on basic necessities
- Discussion of the potential impact on education and skills improvement
VI. Housing may be cheaper
- Explanation of how cheaper housing may make shelter more accessible
- Discussion of the potential impact on small business start-ups
VII. Cheaper for government to borrow
- Explanation of how cheaper borrowing may enable the government to spend more on education and healthcare
VIII. 👉Conclusion
- Summary of the potential benefits of increased borrowing and reduced cost of borrowing.
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