In an Effort to Maintain Price Stability, It Is Expected

question 92

Multiple Choice

In an effort to maintain price stability, it is expected that the European Central Bank will raise interest rates in the future. Which of the following is the most likely effect of such an action on short- and long-term interest rates in Europe?

• A)Long-term interest rates will tend to be higher than short-term interest rates.
• B)Both long- and short-term interest rates would be expected to fall sharply.
• C)Long-term interest rates will be about the same as short-term interest rates.
• D)No relative change in short- and long-term interest rates could be predicted.

---

Definitions:

Acquaintance Phase

The initial stage in a relationship or interaction where parties get to know basic information about each other.

Leadership Making

Leadership making refers to the process of developing, shaping, and evolving leadership capabilities and relationships over time, both in individuals and within organizations.

Stranger Phase

The initial stage in some interpersonal and group development processes where individuals are not yet familiar or comfortable with each other.

Leadership Making

An approach that emphasizes the development of high-quality leader-member exchanges, aiming to transform average LMX relationships into partnerships characterized by mutual respect, trust, and obligation.