On Average, Short-Term Interest Rates Are Higher Than Long-Term Rates

question 239

True/False

On average, short-term interest rates are higher than long-term rates to compensate for higher risk in the short term.

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Definitions:

External Benefit

A positive effect on a third party or the general public that arises from a transaction between others.

Producer Surplus

The difference between what producers are willing to accept for a good or service and what they actually receive, due to higher market prices.

Consumer Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service and the total amount that they actually do pay.

Financial Viability

The ability of an entity or project to manage its expenses and generate sufficient revenue to continue operating effectively.