Which of the Following Statements Is CORRECT,other Things Held Constant

question 27

Multiple Choice

Which of the following statements is CORRECT,other things held constant?

• A) If companies have fewer good investment opportunities,interest rates are likely to increase.
• B) If individuals increase their savings rate,interest rates are likely to increase.
• C) If expected inflation increases,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.

---

Definitions:

Histogram

A graphical representation of a frequency distribution that uses bars of different heights to show the number of values that fall within each class interval.

Line Chart

A type of chart that displays information as a series of data points connected by straight line segments, often used to visualize trends over time.

Illustration

A visual representation or example that helps explain or clarify something.

Frequency Distribution

A summary of data showing the number (frequency) of observations falling within specified intervals.