Which Is Not a Theory Related to the Term Structure

question 44

Multiple Choice

Which is not a theory related to the term structure of interest ratio?

• A)Expectations hypothesis
• B)Liquidity preference theory
• C)Efficient market hypothesis
• D)Market segmentation theory

---

Definitions:

Trade Surplus

A situation where a country's exports exceed its imports over a given time period, reflecting a positive balance of trade.

Domestic Investment

The total capital expenditure within a country on physical assets like buildings, machinery, and technology by individuals, businesses, and the government.

U.S. Net Exports

Represents the value of a country's total exports minus its total imports, indicating whether a country is a net exporter or importer.

U.S. Net Capital Outflow

The unequal ratio of domestic purchases of overseas assets to foreign purchases of domestic assets.