Final answer:
The statement that economic turndown leads advanced-economy firms to reduce costs is true. In terms of financial markets, a rise in the money supply, among other factors, can cause a decline in interest rates.
Step-by-step explanation:
The statement 'The recent economic turndown is expected to pressure advanced-economy firms to seek further ways to reduce costs.' can be considered true. In response to economic downturns, firms in advanced economies typically look for ways to become more efficient and cut operational costs to maintain profitability and competitiveness. For example, they might invest in technology to automate processes, negotiate better terms with suppliers, or restructure their organizations to be leaner.
When the financial markets change, the interest rates can be affected. A rise in supply of money, for instance, when financial institutions increase their lending or when central banks implement policies to inject more capital into the economy, can lead to a decline in interest rates. Conversely, a fall in supply would typically cause interest rates to increase, ceteris paribus.