Classify Each of the Following in Terms of Their Effect

question 37

Multiple Choice

Classify each of the following in terms of their effect on interest rates (increase or decrease) :
I. Perceived risk of financial securities increases.
II. Near term spending needs decrease.
III. Future profitability of real investments increases.

• A)I increases: II increases: III increases
• B)I increases: II decreases: III decreases
• C)I decreases: II increases: III increases
• D)I decreases; II decreases; III decreases
• E)None of these choices are correct.