Which of the following is NOT a reason that interest rates remained low despite high budget deficits following the financial crisis?
A) increased demand for U.S. government bonds
B) the perceived riskiness of alternative investments such as stocks
C) low interest rates on corporate bonds and similar short-term assets
D) increases in expected inflation

Question

Quizplus · Accepted Answer

Increases in expected inflation would actually lead to higher interest rates, not lower ones. The other options listed are all factors that could contribute to lower interest rates despite high budget deficits.

Which of the Following Is NOT a Reason That Interest