Question

The general level of interest rates tends to follow:

A) deflation.
B) the business cycle.
C) the default cycle.
D) all of the above.

Answer 1

A fall in demand or a rise in supply in the financial market will lead to a decline in interest rates.

Step-by-step explanation:

A decline in interest rates in the financial market can be caused by a fall in demand or a rise in supply. When there is a lower demand for loans, lenders will need to lower interest rates to attract borrowers. Similarly, when there is an increase in the supply of lenders, the competition for borrowers will drive interest rates down.