The Additional Incentive That the Purchaser of a Treasury Security

question 70

Multiple Choice

The additional incentive that the purchaser of a Treasury security requires to buy a long-term security rather than a short-term security is called the

• A)risk premium.
• B)term premium.
• C)tax premium.
• D)market premium.

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Definitions:

Higher-Educated Workers

Employees who have completed advanced levels of formal education, typically resulting in higher skill levels and wages.

Market Imperfection

Any deviation from the ideal conditions of a fully competitive market, which may lead to inefficient market outcomes.

Persistent Wage Differentials

The continuous difference in wages across sectors, regions, or occupations due to factors like differences in skill levels, working conditions, or geographic location.

Principal-Agent Problems

Issues that arise when a principal hires an agent to perform tasks, and the agent's best interest does not align with the principal's.