Which of the Following Statements Is TRUE

question 111

Multiple Choice

Which of the following statements is TRUE?

• A)The interest rates that banks offer on investments or charge on loans is independent of the time horizon of the investment or loan.
• B)The Bank of Canada determines very short-term interest rates through its influence on the federal funds rate.
• C)The interest rates that are quoted by banks and other financial institutions are real interest rates.
• D)Fundamentally,interest rates are determined by the Bank of Canada.
• E)If interest rates are expected to fall in the future,long-term rates will tend to be higher than short-term rates.