The Increased Spread Between Three-Month LIBOR and Three-Month Bond Yields

question 82

Multiple Choice

The increased spread between three-month LIBOR and three-month bond yields led to ________. This is a classic example of ________.

• A) reduced lending; a liquidity crisis
• B) a rush to buy bonds; an asset bubble
• C) falling risk in financial markets; risk sharing
• D) increased inflationary expectations; cost-push inflation
• E) increased consumer expenditure; the monetary transmission mechanism

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Definitions:

Cro-Magnons

Early modern humans that lived in Europe approximately 40,000 to 10,000 years ago, known for their sophisticated tools and art.

Spears

Long-shafted weapons with a pointed tip, typically used for thrusting or throwing.

Environment

The surrounding conditions, influences, and natural life in which a person, animal, or plant lives and operates.

Living Lineages

Sequences of living organisms that are descended from a common ancestor, showcasing the path of evolution.