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:

Classify

The act of organizing or sorting things into categories based on shared characteristics or criteria.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a comprehensive classification system for psychiatric disorders.

Real-World Tests

Practical evaluations conducted under natural or operational conditions as opposed to controlled or laboratory conditions to assess the performance of a system or individual.

Reliability

Refers to the consistency of a research study or measuring test.