Which of the following would be most likely to lead to higher interest rates on all debt securities in the economy?

A. The economy moves from a boom to a recession.

B. Corporations step up their expansion plans and thus increase their demand for capital.

C. Households start saving a larger percentage of their income.

Question

Kara Duffy

Business

27 January, 15:10

Which of the following would be most likely to lead to higher interest rates on all debt securities in the economy?

A. The economy moves from a boom to a recession.

B. Corporations step up their expansion plans and thus increase their demand for capital.

C. Households start saving a larger percentage of their income.

+1

Answers (1)

Know the Answer?

Alyssa Hendricks · Answer 1

The correct answer is a) The economy moves from a boom to a recession

Explanation:

The fiscal policy used by the federal reserve is the use of government spending and tax policies to contract or expand the economy.

If the Federal Reserve of the United States increases the interest rates it carries a contract policy of the economy. It is used to reduce the inflation and the economy moves from a boom to a recession