Which of the Following Is Correct

question 10

Multiple Choice

Which of the following is correct?

• A)Economic forecasts are precise and aggregate spending responds almost immediately to interest rate changes.
• B)Economic forecast are precise and aggregate spending responds to interest rate changes with a lag.
• C)Economic forecasts are imprecise and aggregate spending responds almost immediately to interest rate changes.
• D)Economic forecast are imprecise and aggregate spending responds to interest rate changes with a lag.

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Definitions:

Fixed Rate Debt

A type of loan or security with an interest rate that remains constant throughout the life of the loan or security.

Interest Rate Swaps

Financial derivatives contracts where two parties agree to exchange one stream of interest payments for another, based on a specified principal amount.

Net Interest

Net interest refers to the difference between the interest income generated by banks or financial institutions and the amount of interest paid out to their depositors.

Copper Futures

Contracts to buy or sell copper at a predetermined price on a specified future date.