The Term Structure of Interest Rates Refers to

question 29

Multiple Choice

The term structure of interest rates refers to

• A)the general observation that the yield on 30-year government bonds is less than the yield on 90-day Treasury bills.
• B)the variance of the different interest rates available in the economy.
• C)the composition of the market interest rate.
• D)the variation of the market interest rate over the span of one year.
• E)the pattern of interest rates that corresponds to the varying terms to maturity of government securities.

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Definitions:

Output

The cumulative quantity of products or services generated by a corporation or nation.

AVC

Average Variable Cost is the total variable costs divided by the quantity of output.

Diminishing Returns

A principle in economics where each additional unit of input results in a progressively smaller increase in output.

Diseconomies of Scale

The phenomenon where production costs per unit increase as a firm or industry's output expands.