Why do interest rates on loans tend to be higher in a strong economy than in a weak one? a. Credit markets increase in a strong economy, and with increased demand come
increased prices.
b A strong economy encourages borrowers to take out very long-term loans, which have
higher interest rates.
Credit is plentiful in a strong economy, so it is harder to build up the good credit rating
necessary for a low interest rate
d. People in a strong economy have more money, so they can afford more expensive loans.