Which One of the Following Is a Positive Economic Statement

question 53

Multiple Choice

Which one of the following is a positive economic statement?

• A) An increase in the minimum wage will reduce employment.
• B) The minimum wage should be increased.
• C) Social justice will be served by increasing the minimum wage.
• D) Thoughtful people oppose an increase in the minimum wage.

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Definitions:

Interest Rate Risk Premium

The compensation investors demand for bearing interest rate risk.

Term Structure

The relationship between interest rates or bond yields and different terms or maturities.

Duration

Duration is a measure of the sensitivity of the price of a bond or other debt instrument to changes in interest rates, typically expressed in years.

Interest Rate Risk

The potential for investment values to change due to variations in the prevailing interest rates.