We have been taught in high school that lower interest rates boost the economy by spurring consumption.
People can borrow at lower rates of interest and spend on their credit cards and step up demand for goods and services.
On the other hand producers can avail of lower cost funds to produce these same goods that are being demanded at lower rates. Do remember that capital is one of the four factors of production, and therefore capital available at a lower cost is always welcomed by borrowers.
