If Tom Feels That Interest Rates Will Rise in the Next

question 39

Multiple Choice

If Tom feels that interest rates will rise in the next two years, which type of mortgage should he select?

• A)A fixed-rate mortgage
• B)A variable-rate mortgage
• C)A longer amortization
• D)An open VRM

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Definitions:

Average Price Level

An economic measure that calculates the weighted average of prices across a basket of goods and services, often used to identify inflation or deflation in an economy.

Net Exports

The difference between a country's total value of exports and its total value of imports within a certain timeframe.

Government Purchases

Spending by the government on goods and services, which is part of fiscal policy to influence the nation's economy.

GDP

Gross Domestic Product, a measure of the economic output of a country, expressing the total value of all goods and services produced over a specific time period.