Which of the Following Statements Is CORRECTσ

question 4

Multiple Choice

Which of the following statements is CORRECTσ

• A) if expected inflation increases, interest rates are likely to increase.
• B) if individuals in general increase the percentage of their income that they save, interest rates are likely to increase.
• C) if companies have fewer good investment opportunities, 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.

---

Definitions:

Object

A material thing that can be seen and touched.

First Words

First words are the initial form of verbal communication expressed by young children, marking a significant milestone in language development.

Infants

Young babies or children, particularly those under one year of age, who are at the earliest stage of their development.

Months

Units of time in calendars approximately equivalent to the natural period related to the motion of the Moon; used to measure durations shorter than a year and longer than a day.