How do interest rates typically affect aggregate demand in an economy?

Interest rates are the cost of borrowing money, and they play a significant role in how much people and businesses spend in an economy. When interest rates are low, borrowing money becomes cheaper, which encourages people to take loans for things like buying homes or cars. This increase in spending helps boost aggregate demand, which is the total demand for goods and services in the economy. On the other hand, when interest rates are high, borrowing costs rise, leading people to spend less and save more, which can decrease aggregate demand. For example, if a family decides not to take out a loan for a new car because of high interest rates, they will spend less, which can slow down economic growth.