Based on your understanding of the impact of macroeconomic factors, identify which of the following statements are true or false? 1. Countries with strong balance sheets and declining budget deficits tend to have lower interest rates.
2. When the economy is weakening, the Fed is likely to increase short-term interest rates. During the credit crisis of 2008, investors around the world were fearful about the collapse of real estate markets, shaky stock markets, and illiquidity of several securities in the United States and several other nations.
3. The demand for US Treasury bonds increased, which led to a rise in their price and a decline in their yields.
4. When the economy is weakening, the Fed is likely to decrease short-term interest rates.