During the Recession of the Early 1980s the Prices of U.S

question 36

Multiple Choice

During the recession of the early 1980s the prices of U.S. Treasury securities

• A)rose relative to the prices of corporate bonds.
• B)fell relative to the prices of corporate bonds.
• C)remained in the same relative position to the prices of corporate bonds.
• D)were frozen by order of the federal government.

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Definitions:

Treasury Bills

Short-term government securities issued at a discount from their face value, with maturities ranging from a few days to 52 weeks.

Volatile

Describes an investment or market that shows frequent and significant price changes over a short period of time.

Nominal Rate of Interest

The rate of interest before adjusting for inflation, reflecting the rate at which money grows over time.

Purchasing Power

A measure of the amount of goods or services that one unit of currency can buy.