Which outcome is most likely when interest rates are decreased?

When interest rates are decreased, the most likely outcome is an encouragement of consumer spending. Lower interest rates make borrowing cheaper for consumers. This encourages individuals to take out loans for major purchases such as homes, cars, and appliances. Additionally, with reduced borrowing costs, consumers may feel more inclined to spend rather than save, leading to an increase in overall economic activity.

As interest payments on existing loans become less expensive, consumers also have more disposable income available for spending in the economy. Increased consumer spending can stimulate demand for goods and services, which can potentially lead to economic growth.

The other options don't align as closely with the effects of decreased interest rates. Increased inflation may occur as a result of higher spending but is not a direct outcome. Higher rates of savings would be unlikely, as lower rates mean lower returns on savings, discouraging consumers from saving. Finally, stability in retirement planning is not typically directly impacted by a change in interest rates, as this relates more to personal investment strategies and risk tolerance.