During a mild recession, policymakers decide to lower interest rates to encourage borrowing and investment. What is the primary reason for this action?

During a mild recession, policymakers lower interest rates to make borrowing cheaper for individuals and businesses. When interest rates are low, people are more likely to take out loans for things like buying houses or starting new businesses because they don’t have to pay as much in interest. This increase in borrowing can lead to more spending and investment, which helps stimulate the economy and create jobs. For example, if a small business can borrow money at a lower rate, it might invest in new equipment or hire more employees, which can help boost local economic activity. The main goal of this action is to encourage growth and help the economy recover from the recession.