Over the course of 2020, most economies in the world are suffering from negative economic growth. Many central banks in the world has lowered interest rates in attempt to depreciate their currencies....

Q4

Answer part a only

Extracted text: Over the course of 2020, most economies in the world are suffering from negative economic growth. Many central banks in the world has lowered interest rates in attempt to depreciate their currencies. Part (a) What is the effect on the domestic economy if such a policy is successful? Part (b) If the central bank of every economy in the world lowers its interest rate, will economic activity in all these economies be boosted? Explain your answer.