If Fluctuations in Interest Rates Become Smaller,then,other Things Equal,the Demand

question 14

Multiple Choice

If fluctuations in interest rates become smaller,then,other things equal,the demand for stocks ________ and the demand for long-term bonds ________.

• A)increases;increases
• B)increases;decreases
• C)decreases;decreases
• D)decreases;increases

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Definitions:

Supply Of

The total amount of a specific good or service that is available to consumers, which can be influenced by factors such as price, production costs, and technology.

Potentially Efficient

A situation or condition that has the capability to achieve optimum productivity with minimal waste and expense.

Losses

Financial condition when a company's total costs exceed its total revenue, leading to a negative profit.

Market Failure

An economic situation in which the allocation of goods and services by a free market is not efficient, often leading to a net social welfare loss.