Which of the Following Statements Is CORRECT,other Things Held Constant

question 27

Multiple Choice

Which of the following statements is CORRECT,other things held constant?

• A) If companies have fewer good investment opportunities,interest rates are likely to increase.
• B) If individuals increase their savings rate,interest rates are likely to increase.
• C) If expected inflation increases,interest rates are likely to increase.
• D) Interest rates on all debt securities tend to rise during recessions because recessions increase the possibility of bankruptcy,hence the riskiness of all debt securities.
• E) Interest rates on long-term bonds are more volatile than rates on short-term debt securities like T-bills.

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Definitions:

Modeling Effect

The process by which individuals learn behaviors by observing and imitating others.

Media Coverage

The broadcasting or publishing of news and information to the public through various communication channels.

Celebrity Suicides

The phenomenon where suicides of famous individuals may influence others to emulate the behavior through media exposure.

Altruistic Suicides

Suicides committed for the benefit of others or for the greater good, often in the context of pressures within a tightly knit community.