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:

Massed Practice

A learning strategy that involves studying or practicing something repeatedly and intensively in a short period of time.

Overlearning

The process of practicing a skill beyond the point of mastery, which helps in retaining information longer.

Method Of Loci

A mnemonic device that aids in memory by associating information with specific physical locations.

Consolidation

The process by which memories stabilize in the brain after initial acquisition.