Classify Each of the Following in Terms of Their Effect

question 18

Multiple Choice

Classify each of the following in terms of their effect on interest rates (increase or decrease) :
I. Covenants on borrowing become more restrictive.
II. The Federal Reserve increases the money supply.
III. Total household wealth increases.

• A)I increases,II increases,III increases
• B)I increases,II decreases,III decreases
• C)I decreases,II increases,III increases
• D)I decreases,II decreases,III decreases
• E)None of the options

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Definitions:

Misrepresentations

False statements or lies that can affect contracts and agreements, leading to possible legal action for rescission or damages.

Economic Duress

A situation where a person or entity is forced to enter into an agreement or transaction due to financial pressure or threats.

Disproportionately Small

Referring to an amount or share that is significantly less than what is considered fair or equal in comparison to others.

Opinion Statements

Expressions that communicate personal beliefs, views, or evaluations, rather than objective facts.