When Yield Curves Are Flat

question 11

Multiple Choice

When yield curves are flat

• A)long-term interest rates are above short-term interest rates.
• B)short-term interest rates are above long-term interest rates.
• C)short-term interest rates are about the same as long-term interest rates.
• D)medium-term interest rates are above both short-term and long-term interest rates.

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Definitions:

Recency Effect

The tendency to better remember information that is encountered last in a series.

Salience Effect

Refers to the tendency of individuals to focus on items or information that stand out more noticeably or are more significant to them.

Depth of Processing

A theory suggesting the depth (shallow to deep) of mental processing affects memory recall; deeper processing leads to better recall.

Retroactive Interference

The phenomenon where newly learned information interferes with the recall of information learned previously.