Explain whether the Federal Reserve reducing interest rates helps to expand economic growth. (1 point) Responses
1. Reducing interest rates does not help the economy expand because prices of goods and services decrease from reduced demand.
2. Reducing interest rates does not help the economy expand because businesses save instead of spend with low-interest rates, slowing economic growth.
3. Reducing interest rates helps the economy expand because it lowers the cost of borrowing for business to expand, leading to more jobs and economic growth.
4. Reducing interest rates helps the economy expand because businesses earn a greater return on their savings, leading to additional spending and economic growth.