According to the Liquidity Premium Theory of the Term Structure,a

question 74

Multiple Choice

According to the liquidity premium theory of the term structure,a downward sloping yield curve indicates that short-term interest rates are expected to

• A)rise in the future.
• B)remain unchanged in the future.
• C)decline moderately in the future.
• D)decline sharply in the future.

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Definitions:

Extinction

Within the realm of psychology, this refers to the slow diminishment and ultimate vanishing of a learned reaction when the previously associated stimulus is no longer linked with the natural stimulus.

Generalization

The process or result of making a statement or conclusion that applies to many instances from specific observations.

Extinction

In psychology, the gradual weakening and eventual disappearance of a learned response when it is no longer reinforced.

Classical Conditioning

A cognitive process where two stimuli are repeatedly linked together; the response, first elicited by the second stimulus, is finally elicited by the first stimulus.