How might this increase affect the willingness of people and businesses to borrow and spend?

An increase in interest rates typically discourages borrowing and spending, as higher rates lead to increased costs for loans and credit. For individuals, this means higher mortgage and credit card payments, which can strain budgets and reduce disposable income. Businesses may also be deterred from investing in expansion or new projects due to the higher cost of financing. Overall, the decreased willingness to borrow and spend can slow economic growth.