The Segmented Markets Theory Can Explain

question 110

Multiple Choice

The segmented markets theory can explain

• A)why yield curves usually tend to slope upward.
• B)why interest rates on bonds of different maturities tend to move together.
• C)why yield curves tend to slope upward when short-term interest rates are low and to be inverted when short-term interest rates are high.
• D)why yield curves have been used to forecast business cycles.

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Definitions:

Dispositional Attribution

The tendency to attribute someone's behavior to their personality or inherent traits rather than to situational factors.

Cognitive Dissonance

A psychological discomfort experienced when holding contradictory beliefs or values, often leading to a change in belief or behavior to reduce discomfort.

Foot-In-The-Door

A compliance technique where a small initial request is made which is easy to agree to, followed by a larger request.

Fundamental Attribution Error

The inclination to give too much importance to individual traits and overlook the influence of circumstances when evaluating the actions of others.