When the Growth Rate of the Economy Slows We Would

question 31

Multiple Choice

When the growth rate of the economy slows we would expect:

• A) The risk to increase for U.S. Treasury securities
• B) The risk spread to increase more between U.S. Treasury Securities and Aaa securities than between Aaa and Baa securities
• C) The risk spread to increase more between Aaa and Baa securities than U.S. Treasuries and Aaa securities
• D) Investors to purchase more junk bonds in search of a higher yield

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Definitions:

Free Will

The concept that human beings have the ability to make choices that are not predetermined by external circumstances or internal conditions.

Involuntary Reaction

A response to a stimulus that occurs automatically without conscious intent or control.

Unrelated Stimulus

A stimulus that has no connection or relevance to the task at hand or to another specified stimulus.

Reinforcement

A concept in behaviorism that increases the likelihood of a behavior being repeated through positive or negative stimuli.