Final answer:
Interest rates vary for different loan types and borrower risk profiles, but they are generally influenced by central bank rates. A fall in demand or a rise in supply of loanable funds can lead to reduced interest rates.
Step-by-step explanation:
The element of truth in the student's question lies in option (a) which states that there are many interest rates, and they move independently of each other. While it's true that different interest rates do exist for various loan types and borrowers, they are not completely independent. They tend to move with trends set predominantly by central bank policies, such as the federal funds rate. Factors such as a fall in demand for loans or a rise in supply of loanable funds can lead to lower interest rates as lenders compete for borrowers. In contrast, if there is a rise in demand for loans or a fall in supply, interest rates are likely to increase.