Long-term interest rates are ________ than short-term interest rates because long-term loans are ________ than short-term loans.

Question

Quizplus · Accepted Answer

Long-term interest rates are typically higher than short-term rates because the longer duration of the loan represents a greater risk to the lender, including the risk of inflation and the uncertainty of future economic conditions, which they compensate for by charging higher interest rates.

Long-Term Interest Rates Are ________ Than Short-Term Interest Rates Because