Which of the following is likely to happen to short-term and long-term interest rates during expansions?
A)Both the short-term and the long-term interest rates rise during expansions.
B)The short-term interest rates fall during expansions but the long-term interest rates rise during expansions.
C)Both the short-term and the long-term interest rates fall during expansions.
D)The short-term interest rates rise during expansions but the long-term interest rates fall during expansions.

Question

Quizplus · Accepted Answer

During economic expansions, demand for borrowing increases, leading central banks to raise interest rates to control inflation, affecting both short-term and long-term interest rates.

Which of the Following Is Likely to Happen to Short-Term