Suppose that financial market participants expect that the central bank will pursue a monetary expansion in the future. Also assume that the yield curve is initially upward sloping. Given this information, we would expect which of the following to occur?
A) The yield curve will become steeper.
B) i2t will increase.
C) i2t will decrease.
D) The yield curve will become downward sloping.
C
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Bank X had a reputation for asking few questions when it provided loans. Five years later, the majority of the loans were not repaid. This is because the bank had failed to address the
A) moral hazard problem. B) free-rider problem. C) contrary selection problem. D) adverse selection problem.
According to new growth theory ________
A) ever-advancing productivity keeps the population growth rate high B) knowledge does not experience diminishing returns C) growth rates and income levels per person around the globe will converge D) knowledge is subject to the law of diminishing returns
Which of the following is closest to a perfectly competitive market?
A) the computer software market B) the market for handmade guitars C) the market for broccoli D) the market for athletic shoes
In the long run, if ATC equals price at the output level where MC = MR then:
A) new firms may be incentivized to enter the industry. B) the firm will shut down. C) the firm will earn a normal profit. D) the firm may be able to minimize losses.