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Author Question: The Fed can influence long-term interest rates by (Read 25 times)

Starlight

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Question 1

The interest rate on a two-year security will continue to adjust until it is equal to


◦ half the interest rate on a one-year security.
◦ twice the interest rate on a one-year security.
◦ an average of the current one-year rate and the expected one-year rate for next year.
◦ the sum of the current one-year rate and the expected one-year rate for next year.

Question 2

The Fed can influence long-term interest rates by


◦ influencing the current one-year rate.
◦ affecting people's expectations of future short-term rates.
◦ influencing the demand for money in the short run.
◦ Both influencing the current one-year rate and affecting people's expectations of future short-term rates are correct.


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Marked as best answer by Starlight on Apr 19, 2019

Kjones0604

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Starlight

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Reply 2 on: Apr 19, 2019
Great answer, keep it coming :)


kusterl

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Reply 3 on: Yesterday
:D TYSM

 

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