Under the Liquidity Premium Theory,a Flat Yield Curve Indicates That

question 35

Multiple Choice

Under the liquidity premium theory,a flat yield curve indicates that investors expect future short-term rates to

• A) fall.
• B) rise.
• C) remain constant.
• D) either fall or remain constant.

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Definitions:

Kansas Farmers' Alliance

An organized agrarian economic movement among farmers in Kansas in the late 19th century that worked for their mutual benefit and protection.

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Newlands Reclamation Act

A 1902 U.S. law that funded irrigation projects for the arid lands of 20 states in the American West, promoting agriculture and settlement.

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