Which of the Following Statements Is CORRECT

question 12

Multiple Choice

Which of the following statements is CORRECT?

• 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.

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Definitions:

Constitutional Right

A right granted and guaranteed by a country's constitution, protecting citizens' freedoms and legal entitlements.

Regulate Slavery

The act of creating and enforcing laws or policies to control the practice of slavery, its conditions, and its economic aspects.

Declaration of War

A declaration of war is a formal announcement by a government that a state of war exists between that nation and another.

Amendment Guaranteeing

Refers to an addition or change to a legal document, such as a constitution, that ensures specific rights or provisions.