The yield curve is the relationship between the:
a. Domestic yield and foreign yield.
b. Real yield (i.e., interest rate) and actual inflation.
c. Nominal yield and time to maturity of a security.
d. Nominal yield on corporate securities and the yield of government securities.
e. Nominal yield and real yield of a security.
Question 2 - Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and current international transactions balance in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises and current international transactions balance becomes more positive (or less negative).
b. The real risk-free interest rate rises and current international transactions balance becomes more negative (or less positive).
c. The real risk-free interest rate and current international transactions balance remain the same.
d. The real risk-free interest rate rises and current international transactions balance remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Question 3 - The most populous country of the globe is:
a. India
b. China
c. Pakistan
d. The EU
e. United States
Question 4 - The yield curve is the relationship between the:
a. Real yield (i.e., interest rate) and actual inflation.
b. Real interest rate and expected inflation rate.
c. Domestic yield and foreign yield.
d. Nominal yield on corporate securities and the yield of government securities.
e. Nominal yield and time to maturity of a security.
Question 5 - Assume that foreign capital flows from a nation increase due to political uncertainly and increased risk. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and reserves account in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises and reserves account becomes more positive (or less negative).
b. The real risk-free interest rate rises and reserves account becomes more negative (or less positive).
c. The real risk-free interest rate and reserves account remain the same.
d. The real risk-free interest rate rises and reserves account remains the same.
e. There is not enough information to determine what happens to these two macroeconomic variables.
Quick Reply
