Which of the Following Statements Is CORRECT

question 15

Multiple Choice

Which of the following statements is CORRECT?

• A) If expected inflation increases, interest rates are likely to increase.
• B) If individuals in general increase the percentage of their income that they save, interest rates are likely to increase.
• C) If companies have fewer good investment opportunities, interest rates are likely to increase.
• D) Interest rates on all debt securities tend to rise during recessions because recessions increase the possibility of bankruptcy, hence the riskiness of all debt securities.
• E) Interest rates on long-term bonds are more volatile than rates on short-term debt securities like T-bills.

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Definitions:

Mounted Tire

A tire that is installed on a wheel and ready for use on a vehicle.

Dial Indicator

A precision measuring tool used to measure small distances and angles with high accuracy, often in mechanical processes for alignment or calibration.

Spacer Ring

A mechanical component used to fill the gap or maintain a specified distance between two parts in an assembly.