A government decides to lower interest rates in an effort to stimulate the economy. Which of the following categories best describes the expected impact of this decision on investment spending and economic growth?

When a government lowers interest rates, it makes borrowing money cheaper for individuals and businesses. This encourages more people to take out loans to buy homes, cars, or invest in new projects. For example, if a small business can borrow money at a lower rate, it might decide to expand its operations, hire more employees, and purchase new equipment. As more businesses invest and consumers spend, the overall economy grows because more money is flowing through it. Therefore, the expected impact of lower interest rates is an increase in investment spending, leading to stronger economic growth.