what-does-von-hayeks-theory-suggest-about-the-relationship-between-interest-rate

Question

What does von Hayek's theory suggest about the relationship between interest rates and economic cycles?

Accepted Answer

Lower interest rates lead to expansions followed by deeper recessions.

Answer

Interest rates have no effect on economic cycles.

Answer

Interest rates only affect the duration of expansions, not recessions.

Answer

Higher interest rates lead to expansions followed by deeper recessions.