According to the liquidity premium theory, what does a flat yield curve indicate?
A) Short-term interest rates are expected to remain stable.
B) Short-term interest rates are expected to rise.
C) Short-term interest rates are expected to fall.
D) Long-term interest rates are expected to fall.
C
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Answer the following statement(s) true (T) or false (F)
1. People have rational expectations when their predictions are correct more often than not. 2. Even when econometric equations predict very well, they can be entirely useless as guides to policy. 3. The standard deviation of a portfolio is exactly equal to the average standard deviations of the individual stocks. 4. A risk-averse individual always prefers the basket with the highest standard deviation when choosing among baskets with the same expected value. 5. Uninsurable risks is one reason why fair-odds insurance is not always available.
The real wage is the wage:
A. measured in current dollars. B. employers are required to pay workers. C. required to maintain a minimum standard of living. D. measured in terms of purchasing power.
All successful bidders in a Treasury bill auction pay the __________ price for their bids
A) market-clearing B) highest accepted C) average D) lowest accepted
When current government expenditures exceed current tax revenues and the economy is achieving full employment:
A. the cyclically adjusted budget has neither a deficit nor a surplus. B. the cyclically adjusted budget has a deficit. C. fiscal policy is contractionary. D. the cyclically adjusted budget has a surplus.