The Effect of Monetary Policy on Long-Term Interest Rates Is

question 89

Multiple Choice

The effect of monetary policy on long-term interest rates is usually:

• A)larger than its effect on short-term interest rates.
• B)smaller than its effect on short-term interest rates.
• C)immediate, as long-term rates are closely linked to the cash rate.
• D)larger than its effect on short-term rates, but the effect occurs with a lag.

---

Definitions:

Receivables Period

The average number of days it takes for a company to collect payments from its customers.

Inventory Period

The average time it takes for a company to sell its inventory and convert it into sales.

Payables Period

The average amount of time it takes for a business to pay its invoices and bills to suppliers.

Payables Period

The average period of time it takes for a business to pay off its debts to suppliers.