If the yield curve is flat, using liquidity premium theory, what do you know about the expected future short-term interest rate?
What will be an ideal response?
If the yield curve is flat, the expected future short-term interest rate(s) must be lower than the current short-term rate because liquidity premium theory assigns a positive risk premium to longer maturities, which is why the yield curve usually slopes upward.
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Which of the following is an example of a carrying cost of holding an inventory?
A) the delivery charges for an order B) the cost of storage C) the cost of the paperwork necessary to pay for each order D) the managerial time spent creating an order for inventory
A compensation program that includes all performance indicators that influence an employee's effort is called the:
A. risk-sharing premium. B. informativeness principle. C. efficient bargaining solution. D. incentive coefficient.
Which of the following is not a supply factor in economic growth? A)full employment B)the stock of capital C)technological advance D)The size and quantity of the labour force
What will be an ideal response?
By acting as a lender of last resort during a bank panic, the Federal Reserve enables banks to
A) encourage the public to borrow directly from the Fed to alleviate the panic. B) call in their loans from their customers to restore faith in the banking system. C) borrow increasingly large amounts from the Fed, which will reduce the public's faith in the banking system. D) satisfy customers' desires to withdraw money and eventually restore the public's faith in the banking system.