Monday 5 November 2012

Which of the following would be most likely to lead to higher interest rates on all debt securities in the economy? a. The economy moves from a boom to a recession. b. Households start saving a larger percentage of their income. c. The Federal Reserve uses monetary policy in an attempt to stimulate the economy. d. Corporations step up their expansion plans and thus increase their demand for capital. e. The level of inflation begins to decline.

Which of the following would be most likely to lead to higher interest rates on all debt securities in the economy?





a.

The economy moves from a boom to a recession.

 


b.

Households start saving a larger percentage of their income.

 


c.

The Federal Reserve uses monetary policy in an attempt to stimulate the economy.

 


d.

Corporations step up their expansion plans and thus increase their demand for capital.

 


e.

The level of inflation begins to decline.



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