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Classify each of the following in terms of its effect on interest rates (increase or decrease): I. Perceived risk of financial securities increases. II. Near

Classify each of the following in terms of its 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.

Choose one of the options below

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.

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