the economics of money, banking, and financial markets

178 $

© 2014 Pearson Canada Inc.$

46. 
    

    The U-shaped yield curve in the figure above indicates that the inflation rate is expected to
    ____.
    A) remain constant in the near-term and fall later on
    B) fall sharply in the near-term and rise later on
    C) rise moderately in the near-term and fall later on
    D) remain constant in the near-term and rise later on
    Answer: B
    Diff: 3 Type: MC Page Ref: 129
    Skill: Applied
    Objective List: 6.2 Explain how interest rates on bonds with different maturities are related

    
    


47. 
    

    The mound-shaped yield curve in the figure above indicates that short-term interest rates are
    expected to ____.
    A) rise in the near-term and fall later on
    B) fall moderately in the near-term and rise later on
    C) fall sharply in the near-term and rise later on
    D) remain unchanged in the near-term and fall later on
    Answer: A
    Diff: 3 Type: MC Page Ref: 128
    Skill: Applied
    Objective List: 6.2 Explain how interest rates on bonds with different maturities are related

    
    


48. 
    

    The mound-shaped yield curve in the figure above indicates that the inflation rate is expected
    to ____.
    A) remain constant in the near-term and fall later on
    B) fall moderately in the near-term and rise later on
    C) rise moderately in the near-term and fall later on
    D) remain unchanged in the near-term and rise later on
    Answer: C
    Diff: 3 Type: MC Page Ref: 128
    Skill: Applied
    Objective List: 6.2 Explain how interest rates on bonds with different maturities are related