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

Question

Quizplus · Accepted Answer

Long-term loans are riskier than short-term loans because there are more uncertainties and inflation risks associated with lending money over a longer period of time. Lenders demand a higher return on their investment to compensate for the additional risk, which leads to higher long-term interest rates.

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