The Liquidity Preference Theory Suggests That Long-Term Interest Rates Tend

question 140

True/False

The liquidity preference theory suggests that long-term interest rates tend to be higher than short-term rates (and therefore the yield curve slopes up)due to the lower liquidity and higher responsiveness to general interest rate movements of longer-term securities.

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Definitions:

Helper T Cells

A type of T cell that plays a critical role in the immune response by activating and directing other immune cells.

Phagocytosis

The process by which cells, particularly immune cells, engulf and digest large particles or microorganisms.

MHC Class II

Molecules present on immune cells that present antigens to helper T cells, crucial for initiating immune responses.

Antigen-Presenting Cell

A cell that displays antigen complexed with major histocompatibility complexes on their surfaces for recognition by T-cells.