A Country Seeking to Maintain Internal Balance Would Be Most

question 43

Multiple Choice

A country seeking to maintain internal balance would be most concerned with:

• A) attaining low levels of unemployment.
• B) ensuring that savings is weighted more towards domestic investment than the current account.
• C) large fluctuations in output.
• D) an adequate stock of gold reserves.
• E) stable employment levels.

---

Definitions:

Duration

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

Adjustable-Rate Mortgages

A type of mortgage in which the interest rate applied to the outstanding balance varies throughout the life of the loan.

Immunization

A strategy in bond portfolio management aimed at minimizing the impact of interest rate changes on the portfolio's value while ensuring that the portfolio meets future cash flow needs.

Asset Portfolio

A collection of various types of investments held by an individual or institution.