riefly outline how each of the following theories explain the shape of the yield curve. A. Liquidity preference theory B. Expectations theory C. Preferred habitat theory D. Market segmentation theory

After a speculative boom, the stock market crashes, and as with previous crashes, causes the wealth of millions to fall.  An economic slowdown follows. a. government spending should increase or decrease? b. taxes should increase or decrease? c. discount rates and federal funds should increase or decrease? d. reserve requirement increase or decrease? e. open market operations increase or decrease?

dy Tools Tips ps 1. The opportunity cost of holding money Suppose you've just inherited $5,000 from a relative. You're trying to decide whether to put the $5,000 in a non-Interest-bearing account so that you can use it whenever you want (that is, hold it as money) or to use it to buy a U.S. Treasury band. The opportunity cost of holding the inheritance as money depends on the interest rate on the bond. For each of the interest rates in the following table, compute the opportunity cost of holding the $5,000 as money. Interest Rate on Government Bond Opportunity Cost (Dollars per year) (Percent) 5 What does the previous analysis suggest about the market for money? O The quantity of money demanded increases as the interest rate rises. O The quantity of money demanded decreases as the interest rate rises. O The supply of money is independent of the interest rate.

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