The yield curve is the relationship between the:
a. Real yield (i.e., interest rate) and actual inflation.
b. Real interest rate and expected inflation rate.
c. Domestic yield and foreign yield.
d. Nominal yield on corporate securities and the yield of government securities.
e. Nominal yield and time to maturity of a security.
.E
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Suppose that income taxes are reduced by $400 billion and households increase consumption by 80% of the resulting change in disposable income. Suppose also that the multiplier is 2. What is the marginal propensity to consume?
A) 0.2 B) 0.4 C) 0.8 D) 1.6
Which of the following is true according to the case study on U.S. / China trade presented in the chapter?
A) China has relative abundance in capital. B) China has relative abundance in skilled labor. C) The United States has relative scarcity in unskilled labor. D) The United States has relative scarcity in capital.