According to Pure Expectations Theory, If Interest Rates Are Expected

question 43

Multiple Choice

According to pure expectations theory, if interest rates are expected to decrease, there will be ____ pressure on the demand for short-term funds by borrowers and ____ pressure on the demand for long-term funds issued by borrowers.

• A)upward; upward
• B)downward; downward
• C)upward; downward
• D)downward; upward

---

Definitions:

Linear Inequality

An inequality which involves a linear function and includes relations like greater than, less than, or equal to.

Graphing Calculator

A handheld electronic device capable of plotting graphs, solving equations, and performing other mathematical computations.

Linear Inequality

An inequality that involves a linear function, representing a range of possible values that satisfy the inequality.

Solution

The answer to a problem or the value or values that satisfy an equation.