The Term Structure of Interest Rates Predicts That Long-Term Interest

question 28

Multiple Choice

The term structure of interest rates predicts that long-term interest rates will exceed short-term interest rates,resulting in an upward sloping yield curve. If Central Banks were to intervene in the financial market to "flatten" the shape of the yield curve,they would attempt this by

• A) purchasing long-term bonds.
• B) selling long-term bonds.
• C) purchasing short-term bonds.
• D) selling short-term bonds.

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Definitions:

Education of Freedpeople

The process of providing education to formerly enslaved individuals following the Civil War in the United States.

Freedmen's Bureau

A U.S. federal government agency established in 1865 to assist freed slaves in the South during the Reconstruction period after the Civil War.

White Leagues

Paramilitary groups that formed in the Southern United States during the Reconstruction era, aiming to use violence and intimidation to restore white supremacy and overthrow Republican governments.

Adelbert Ames

A Union General in the American Civil War and later a politician who served as Governor of Mississippi during the Reconstruction era.