Increases in interest rates ________.
A) cause large capital losses
B) could lead to bank failures
C) affect consumers' willingness to buy houses
D) all of the above

Question

Quizplus · Accepted Answer

Increases in interest rates can cause large capital losses for investors as the value of their fixed-income investments decreases. Higher interest rates can also lead to bank failures if they are unable to manage their interest rate risk effectively. Additionally, higher interest rates can affect consumers' willingness to buy houses as the cost of borrowing increases. Therefore, all of the choices are correct.

Increases in Interest Rates ________