The Segmented Markets Theory Can Explain

question 110

Multiple Choice

The segmented markets theory can explain

• A)why yield curves usually tend to slope upward.
• B)why interest rates on bonds of different maturities tend to move together.
• C)why yield curves tend to slope upward when short-term interest rates are low and to be inverted when short-term interest rates are high.
• D)why yield curves have been used to forecast business cycles.

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Definitions:

Instrumentality

The likelihood that something good (or bad) will come from an increase in effort.

Expectancy Theory

A motivation theory stating that an individual's motivation is related to their expectation of a reward and the attractiveness of that reward.

Manifest Needs Theory

A psychological theory that focuses on observable needs that motivate an individual to perform certain behaviors.

Behavior Modification

The process of changing behavior because of a reward or lack of a reward.