The Price of Short-Term Bonds Are Commonly ____ Those of Long-Term

question 85

Multiple Choice

The price of short-term bonds are commonly ____ those of long-term bonds.

• A)more volatile than
• B)equally volatile as
• C)less volatile than
• D)A and C occur with about equal frequency

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Definitions:

Deadweight Loss

A loss in total societal welfare that occurs when market equilibrium is not achieved or when market imperfections exist, leading to inefficient allocation of resources.

Relatively Inelastic

Describes a situation where the demand for a good or service changes by a smaller percentage than changes in its price.

Deadweight Loss

A situation where inefficiency in the market leads to a loss of total social welfare, typified by a gap between the supply and demand curves.

Relatively Elastic

Describes a situation where the demand or supply for a good or service significantly changes in response to changes in price.