Which of the following statements is CORRECT, other things held constant? A. If companies have fewer good investment opportunities, interest rates are likely to increase B. If individuals increase their savings rate, interest rates are likely to increase. C. If expected inflation increases, interest rates are likely to increase. D. Interest rates on all debt securities tend to rise during recessions because recessions increase the possibility of bankruptcy, hence the riskiness of all debt securities Interest rates on long-term bonds are more volatile than rates on short-term debt securities like T-bills. QUESTION 17 Which of the following would be most likely to lead to a higher level of interest rates in the economy? O A Households start saving a larger percentage of their income. B. Corporations step up their expansion plans and thus increase their demand for capital. C. The level of inflation begins to decline. D. The economy moves from a boom to a recession. The Federal Reserve decides to try to stimulate the economy QUESTION 18 Suppose the US Treasury issued 550 billion of short-term securities and sold them to the public. Other things held constant, what would be the most likely effect on short-term securities' prices and interest rates? A Prices and interest rates would both rise. B. Prices would rise and interest rates would decline. C.Prices and interest rates would both decline D. Prices would decline and interest rates would rise There is no reason to expect a change in either prices or interest rates and Chek Sue All Ann to sell amser