If the Yield Curve Slope Is Flat,the Liquidity Premium Theory

question 45

Multiple Choice

If the yield curve slope is flat,the liquidity premium theory indicates that the market is predicting

• A) a mild rise in short-term interest rates in the near future and a mild decline further out in the future.
• B) constant short-term interest rates in the near future and further out in the future.
• C) a mild decline in short-term interest rates in the near future and a continuing mild decline further out in the future.
• D) constant short-term interest rates in the near future and a mild decline further out in the future.

---

Definitions:

Self-concept

An individual's perception of self, encompassing beliefs, attributes, and who and what the self is.

Social Identity

Refers to the portion of an individual's self-concept derived from perceived membership in a relevant social group.

Collectivist Cultures

Cultures that value the goals, needs, and views of the group over the individual, emphasizing community and family ties.

Individualist Cultures

Societies that emphasize personal achievements and individual rights, often prioritizing the individual over the group.