The risk structure of interest rates refers to
A) the amount of additional interest necessary to compensate savers for the greater risk of default on some bonds.
B) the relationship among the interest rates on similar bonds with different maturities.
C) the relationship among the interest rates on bonds with the same maturity.
D) the amount of additional yield necessary to compensate savers for the lesser liquidity of some bonds.
C
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Suppose the annual growth rate of real GDP for the nation of Vicuna is 8%, the growth rate of velocity is 0%, and the growth rate of the money supply is 12%
a. What is the current rate of inflation? b. What will happen to the inflation rate if the growth of the money supply increases to 16%? c. What will happen to the inflation rate if the growth of the money supply increases to 16%, and at the same time, the growth rate of velocity increases to 4%?
In a market economy, producers will produce the goods and services that
A. Optimize producer utility. B. Consumers need the most. C. Producers want to purchase. D. Consumers demand.
Why do firms engage in price discrimination?
A) to decrease cost B) to increase profits C) to increase consumer surplus D) to prohibit the resale of their products
Firms are making profits in a decreasing-cost industry. Which of the following statements describes what will happen in the long run?
A. More firms will enter this industry, causing the industry supply schedule to shift to the right and the LRAC curve facing firms to shift up. B. Firms will exit this industry, causing the industry supply schedule to shift to the right and the LRAC curve to shift down. C. More firms will enter this industry, causing the industry supply schedule to shift to the right and the LRAC curve facing firms to shift down. D. Firms will exit this industry, causing the industry supply schedule to shift to the left and the LRAC curve to shift down.