Bank deposits — one uniform interest rate for all terms? Statement: Should there be only one rate of interest for term deposits of varying durations in banks? Arguments: I. No — people will refrain from keeping money for longer duration, reducing banks’ stability. II. Yes — a single rate is simpler for common people and may encourage higher deposits.

Introduction / Context:Interest-rate structure on deposits typically varies with term because banks manage asset–liability maturity. This question evaluates whether a single rate for all terms is desirable and whether the offered arguments are strong in reasoning and evidential plausibility.

Given Data / Assumptions:

• I predicts depositors will avoid longer terms if rates are uniform, but it does not explain why they would not still choose terms for safety or convenience.
• II claims simplicity will encourage more deposits, but offers no linkage to behavior beyond conjecture and ignores risk–return trade-offs.
• No empirical evidence is offered; we judge logic quality.

Concept / Approach:

• Strong arguments need a clear causal path and must address how pricing aligns with maturity risk and banking stability.
• Merely stating consequences without mechanism or acknowledging standard practice is weak.

Step-by-Step Solution:

Verification / Alternative check:

Why Other Options Are Wrong:

Common Pitfalls:

Final Answer: