In an Effort to Maintain Price Stability,it Is Expected That

question 66

Multiple Choice

In an effort to maintain price stability,it is expected that the European Central Bank will raise interest rates in the future.Which of the following is the most likely effect of such an action on short- and long-term interest rates in Europe?

• A)Long-term interest rates will tend to be higher than short-term interest rates.
• B)Long-term interest rates will be about the same as short-term interest rates.
• C)Both long- and short-term interest rates would be expected to fall sharply.
• D)No relative change in short- and long-term interest rates could be predicted.
• E)Long-term interest rates will tend to be lower than short-term interest rates.

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Definitions:

Coin

A flat, typically round piece of metal with an official stamp, used as money or in games.

99.7%

Represents the percentage of data that falls within three standard deviations of the mean in a normal distribution, according to the empirical rule.

Sampling Distribution

the probability distribution of a statistic obtained through a large number of samples drawn from a specific population.

Homeowners

Individuals who own their residence, including houses, apartments, or other dwelling types.