Directions : Each of the following question consists of a statement followed by two arguments I and II. You have to decide which of the arguments is a STRONG arguments and which is a WEAK Argument.
Statement : Should there be only one rate of interest for term deposits of varying durations in banks ?
I. No, People will refrain from keeping money for longer duration resulting into reduction of liquidity level of banks.
II. Yes. This will be much simple for the common people and they may be encouraged to keep more money in banks.
The proposed scheme would discourage people from keeping deposit for longer durations and not draw in more funds. So, only argument I holds.