The issue with adjusting interest rates is that it has a very large impact on demand-pull inflation. When interest rates low businesses have easy access to a larger amount of money. This generally lowers unemployment as firms can afford to borrow money for more equipment and workers and don’t need to make as large a profit to pay back the loan.
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This also generates inflation, as businesses spend at a much larger scale than consumers and will suddenly have access to significantly more money. Big business runs on debt, so aside from printing money, lower interest rates are one of the biggest factors in demand-pull inflation.
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