During Poor Economic Conditions,the Spread Between Yields on High-Grade and Low-Grade

question 100

Multiple Choice

During poor economic conditions,the spread between yields on high-grade and low-grade bonds:

• A) decreases.
• B) stays the same.
• C) increases.
• D) are inversely related.

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Definitions:

Real GDP

Gross Domestic Product corrected for inflation, giving a truer depiction of the size of an economy and its growth trajectory over time.

Nominal GDP

The gross domestic product calculated at current market prices, without adjusting for inflation.

Transfer Payments

Payments made by the government to individuals or other entities without the government receiving any goods or services in return, such as welfare benefits or social security.

Net Exports

Net Exports is the value of a country's total exports minus the value of its total imports, indicating whether a country is a net exporter or importer.