When Interest Rates Come Down

question 20

Multiple Choice

When interest rates come down,

• A) people on average are better off since borrowing is now less expensive.
• B) people on average are worse off since the income of lenders will now decrease.
• C) social welfare is left unchanged since what borrowers gain is exactly offset by what lenders lose.
• D) people on average may or may not be better off,depending on how high the rate was to begin with.

---

Definitions:

Health Insurance

Insurance coverage that pays for medical and surgical expenses incurred by the insured, often provided by employers or purchased individually.

Retirement Contributions

Money set aside into retirement accounts, such as a 401(k) or IRA, often with tax advantages.

Medicare

A federal health insurance program in the United States primarily for people who are 65 or older, but also for some younger people with disabilities.

Health Insurance

A form of insurance coverage that pays for medical and surgical expenses incurred by the insured, or reimburses the insured for expenses incurred from illness or injury.