The general level of interest rates tends to follow:
A) deflation.
B) the business cycle.
C) the default cycle.
D) all of the above.

Question

Quizplus · Accepted Answer

The general level of interest rates tends to follow the business cycle, which includes periods of economic expansion and recession. Interest rates typically rise during periods of expansion and fall during periods of recession. Deflation may cause interest rates to fall, but it is not the primary driver of changes in interest rates. The default cycle may also have an impact on interest rates, but it is not a consistent or predictable factor.

The General Level of Interest Rates Tends to Follow