Given a Choice Between 5-Year and 1-Year Instruments Most People

question 3

Multiple Choice

Given a choice between 5-year and 1-year instruments most people would choose 5-year instruments when borrowing and 1-year instruments when lending. Which of the following is a theory consistent with this observation?

• A) Expectations theory
• B) Market segmentation theory
• C) Liquidity preference theory
• D) Maturity preference theory

Grasp the concept of fundamental analysis in forecasting firm performance.

Understand Porter's five forces of competition and their impact on markets.

Calculate economic outcomes for firms under different economic conditions.

Identify the effects of demand shocks on the economy.

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Definitions:

Labor Movement

A collective organization of working people who unite to make decisions or negotiate on matters concerning their employment conditions, including wages, hours, benefits, and working environments.

Wage Slavery

A critical term describing a situation where a person's livelihood depends on wages, especially in a context where the wages are low, and working conditions are poor.

Abolitionists

Individuals who advocated for the ending of slavery and campaigned for emancipation in the United States before and during the Civil War.

American Temperance Society

A societal organization founded in 1826 with the goal of promoting abstinence from alcohol, it played a crucial role in the early temperance movement in the United States.