Assume That Maturity Markets Are Completely Segmented

question 1

Multiple Choice

Assume that maturity markets are completely segmented. If the Treasury issues a large amount of long-term Treasury bonds to finance the budget deficit, this would place ____ pressure on _________-term yields.

• A)upward;  short
• B)downward; short
• C)upward; long
• D)downward; long

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Definitions:

Extrinsic Motivation

A form of motivation that is driven by external rewards such as money, fame, grades, or praise.

Intrinsic Motivation

The drive to engage in activities for their own sake, deriving pleasure and satisfaction from the activity itself rather than from any external rewards.

Individualistic Cultures

Individualistic Cultures emphasize personal goals, autonomy, and independence, valuing individual achievement over collective interests.

Collectivist Cultures

Societies that prioritize the group over the individual, stressing community, cooperation, and interdependence.