One of the four most fundamental factors that affect the cost of money as discussed in the text is the expected rate of inflation.If inflation is expected to be relatively high,then interest rates will tend to be relatively low,other things held constant.

Question

Quizplus · Accepted Answer

If inflation is expected to be relatively high, interest rates will tend to be relatively high to compensate for the loss of purchasing power associated with inflation. Therefore, the statement is false.

One of the Four Most Fundamental Factors That Affect the Cost