Based Solely on the Maturity Preference Theory, Long-Term Interest Rates

question 42

Multiple Choice

Based solely on the maturity preference theory, long-term interest rates:

• A)should equal short-term rates.
• B)are unrelated to short-term rates.
• C)may be higher than or lower than short-term rates.
• D)should be lower than short-term rates.
• E)should be higher than short-term rates.

---

Definitions:

Special-Interest Issues

Topics or concerns that are of particular importance to specific groups or organizations.

Sugar Imports

The act of bringing sugar into one country from another for sale or trade.

Income Redistribution

The transfer of income, wealth, or resources from some individuals to others by means of a social policy or mechanism.

Special-Interest Issue

Matters that are of specific concern to a particular group or sector, affecting them directly.