Figure 10.5 -Refer to Figure 10.5.A Shift from MP₁ to MP₃ Will

question 93

Multiple Choice

Figure 10.5

-Refer to Figure 10.5.A shift from MP₁ to MP₃ will occur if

• A) the term structure effect increases.
• B) the default-risk premium decreases.
• C) investors increase the short-term interest they expect in the future.
• D) the Bank of Canada increases its target for the short-term nominal interest rate.

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Definitions:

Ionic Charges

The electrical charge that an atom acquires when it gains or loses electrons in the formation of an ionic compound.

Cation

A cation is a positively charged ion that results from the loss of one or more electrons by an atom.

Anion

A negatively charged ion, attracted to the anode during electrolysis, typically formed by the gain of electrons.

Anion

A negatively charged ion, which is formed when an atom gains one or more electrons.