Suppose there is a decrease in the short-term interest rate.Give this reduction in the current short-term interest rate,which of the following will most likely occur?
A) the long-term interest rate will increase.
B) the long-term interest rate will remain the same.
C) the long-term interest rate will decrease by more than the short-term rate.
D) the long-term interest rate will decrease by the same amount as the short-term rate.
E) the long-term interest rate will decrease,but by less than the short-term rate.
Correct Answer:
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