Which of the Following Statements Is CORRECT

question 42

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:

Committment

The act of dedicating oneself to a cause, activity, or purpose with earnest intention. This is another way of expressing dedication or pledge.

Potential Coalition

A group of parties or individuals that could come together to form an alliance based on shared interests or goals, though they have not yet done so.

Proactive Action

Proactive action involves taking initiative and actions in anticipation of future problems, needs, or changes rather than reacting to events after they occur.

Critical Mass

The minimum amount or number required for a specific process, such as a chain reaction, to occur or to sustain itself.