According to the Expectations Theory of the Term Structure

question 57

Multiple Choice

According to the expectations theory of the term structure,

• A) when the yield curve is steeply upward-sloping, short-term interest rates are expected to rise in the future.
• B) when the yield curve is downward-sloping, short-term interest rates are expected to decline in the future.
• C) buyers of bonds prefer short-term to long-term bonds.
• D) all of the above.
• E) only A and B of the above.

---

Definitions:

Productivity

The measure of output per unit of input, reflecting the efficiency of production.

Discriminates

The act of unjustly distinguishing or treating people differently based on characteristics such as race, age, gender, etc.

Higher Costs

Situations in which the expenses related to producing or obtaining goods and services increase, leading to a rise in prices or a squeeze on profit margins.

Labor-Market Discrimination

The differential treatment of individuals in the labor market based on race, gender, religion, age, sexual orientation, or other non-relevant factors that reduces prospects for equal opportunity employment.