As Market Interest Rates Rise, the Cost of the Public

question 13

Multiple Choice

As market interest rates rise, the cost of the public debt

• A) is unaffected, because the interest on the debt is fixed.
• B) falls, because investors will prefer safer financial assets such as Treasury bonds.
• C) rises, because the government must make larger interest payments.
• D) is unaffected until Congress votes to increase the interest paid.

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Definitions:

Mutual Fund

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Equity Loan

A loan where the equity in the borrower's home is used as security.

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Sales Narrative

A compelling story or explanation designed to sell a product or service, highlighting its benefits and aligning with the customer's needs.