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By reducing their interest rates the Commonwealth Bank encourages borrowing by both consumers and businesses, which leads to a “rise in consumption and investment demand” . In turn increasing the level of spending and level of activity in the economic market. Reduced interest rates can also mean that existing debt holders’ can get cheaper rates on already existing loans which means it becomes cheaper and it allows them to increase their spending in normal day to day life.
The Commonwealth Bank is a part of an oligopoly which is a market or industry dominated by a small number of sellers...
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