A Flight to Quality Is Most Likely to Have Which

question 30

Multiple Choice

A flight to quality is most likely to have which of these effects?

• A)It will be more difficult for individual borrowers to borrow, but ease borrowing for businesses.
• B)It will be easier for both individuals and businesses that want to sell high-risk bonds.
• C)It will decrease the default risk premium that higher risk borrowers have to pay and may bring about economic growth.
• D)It will increase the default risk premium that higher risk borrowers will pay and may cause some businesses to cut costs.

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Definitions:

Young People

A term referring to individuals in their late childhood and adolescence up to early adulthood.

Deferred Marriage

The choice or condition of postponing marriage until a later age for various reasons, including career, education, or personal preference.

Herbert Hoover

The 31st President of the United States (1929–1933), whose presidency was marked by the onset of the Great Depression.

Andrew Mellon

An American banker, industrialist, philanthropist, and Secretary of the Treasury known for his influence during the 1920s.