When examining the effects of interest rates on borrowing decisions,we distinguish between the short-term and the long-term.How long is the long-term in this context?
A) 100 years or more
B) 10 years or more
C) 1 year or more
D) Anything longer than an overnight (24-hour) loan

Question

Quizplus · Accepted Answer

The long-term in this context is generally considered to be 10 years or more. This is because interest rates on long-term loans, such as mortgages, are typically fixed for a period of 10-30 years, and borrowers make decisions based on these long-term rates. Short-term rates, on the other hand, can fluctuate more frequently and are often used for smaller loans, such as credit cards or short-term business loans.

When Examining the Effects of Interest Rates on Borrowing Decisions,we