Which of the Following Statements Is True If Interest Rates

question 122

Multiple Choice

Which of the following statements is true if interest rates were zero?

• A) The demand for bonds increases because bonds will be a more attractive alternative to money.
• B) People will hold their wealth in the form of money rather than in bonds.
• C) Bonds and money will become perfect substitutes since both are non-interest earning assets.
• D) The supply of bonds will increase.

---

Definitions:

Avatar Design

Avatar design involves creating a visual representation or character, often used in digital contexts, to represent users or entities in virtual spaces.

Tattoo Design

Artistic patterns or illustrations that are permanently inscribed on the skin using ink and needles.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision, used to evaluate the trade-offs in economic decision-making.

Marginal Principle

A decision-making practice that involves considering the additional benefits or costs of a change in activity level, choosing to increase the level if the marginal benefits exceed marginal costs.