True or false?

If management is sure that the economy is at the peak of a boom and is about to enter a recession, a firm that needs to borrow money should probably use short-term rather than long-term debt.

An economic recession is a decrease in economic activity over a period of time. During recessions, interest rates drop. A low interest rate helps the growth of the economy, since it facilitates consumption and, therefore, the demand for products. If a company is confident that the economy is about to go into recession, that means they expect rates to drop. So you should invest in short-term debt until rates fall due to the recession.

True or false? If management is sure that the economy is at the peak of a boom and is about to enter a recession, a firm that needs to borrow money should probably use short-term rather than long-term debt.

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True or false?

If management is sure that the economy is at the peak of a boom and is about to enter a recession, a firm that needs to borrow money should probably use short-term rather than long-term debt.