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:

Tactical

Relating to the specific means or maneuvers used to achieve short-term objectives as part of an overall strategy.

Profitable

Generating a financial gain or profit; successful in terms of bringing in more revenue than the cost of operating.

Transaction

The action of conducting business or financial exchanges between two or more parties.

Media Gatekeepers

Individuals or entities, such as editors or producers, who control the flow of information and decide which stories are published or broadcasted.