CIPS Exam A6 Topic 2 Question 73 Discussion

Actual exam question for CIPS's A6 exam

Question #: 73
Topic #: 2

[All A6 Questions]

Which of the following is the most likely consequence of government decreasing interest rates? (2 marks)

APeople spend more

BPeople spend less

CThe economy slows down

DThe cost of borrowing goes up

Show Suggested Answer

Suggested Answer: A

by Florinda at Mar 22, 2025, 09:29 AM

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Ciara

2 months ago

That's a good point, Thea. So maybe the answer is actually A) People spend more.

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Thea

2 months ago

But wouldn't people save more instead of spending, since they earn less on their savings?

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Nancey

2 months ago

I agree with Lakeesha, because lower interest rates make borrowing cheaper.

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Lakeesha

2 months ago

I think the answer is A) People spend more.

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Audry

2 months ago

Haha, the real question is, who actually reads the textbook? Just pick the one that sounds the most logical, and you're golden!

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Jesus

16 days ago

D) The cost of borrowing goes up

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Artie

20 days ago

Haha, who needs textbooks anyway?

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Helene

24 days ago

C) The economy slows down

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Francis

29 days ago

B) People spend less

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Ariel

1 months ago

A) People spend more

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Irma

3 months ago

I'm not entirely convinced. Couldn't lower interest rates also lead to the economy slowing down if it encourages too much borrowing and spending?

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Ligia

2 months ago

C) The economy slows down

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Glory

2 months ago

B) People spend less

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Lamar

2 months ago

A) People spend more

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Devon

3 months ago

I'm pretty sure the correct answer is A. When interest rates go down, borrowing becomes cheaper, so consumers and businesses are more likely to spend more.

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Malika

3 months ago

Well, duh! Lower interest rates mean people can borrow money more easily, so they're obviously going to spend more. It's basic economics, people!

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Alecia

2 months ago

C) The economy slows down

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Veronica

2 months ago

Exactly! Lower interest rates encourage people to spend more.

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Carlota

2 months ago

A) People spend more

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Noah

2 months ago

A) People spend more

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Corrina

3 months ago

B) People spend less

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Rebbecca

3 months ago

A) People spend more

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