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:

Smoking

The act of inhaling and exhaling the smoke of tobacco or a drug.

Calories

Units of energy that measure the amount of energy food provides to the body.

Quit Smoking

The process of stopping or ceasing the habit of inhaling and exhaling the smoke of tobacco or a drug.

Food Intake

The consumption of food substances by organisms to receive necessary nutrients for energy, growth, and maintenance.