n an effort to maintain price stability, it is expected that the European Central Bank will raise interest rates in the future.Which of the following is the most likely effect of such an action on shortterm and longterm interest rates in Europe?

A.

No relative change in short and long term interest rates could be predicted.

B.

Longterm

interest rates will tend to be higher than

shortterm

interest rates.

C.

Longterm

interest rates will be about the same as

shortterm

interest rates.

D.

Both

long term

and

shortterm

interest rates would be expected to fall sharply.