Ceteris paribus, when borrowers increase their current supply of long-term securities, then
A)short-term interest rates will rise.
B)long-term interest rates will rise.
C)long-term interest rates will fall.
D)All of the above

Question

Quizplus · Accepted Answer

When borrowers increase their current supply of long-term securities, the demand for these securities decreases, leading to an increase in long-term interest rates to attract buyers. Short-term interest rates are not directly affected by this action.

Ceteris Paribus, When Borrowers Increase Their Current Supply of Long-Term