If long-term interest rates are 8% and short-term interest rates are 3%, the market expects that: A) short-term rates will remain the same in the future. B) there is no relationship between long-term and short-term rates. C) short-term rates will rise in the future. D) short-term rates will fall in the future.

If long-term interest rates are 8% and short-term interest rates are 3%, the market expects that: A) short-term rates will remain the same in the future. B) there is no relationship between long-term and short-term rates. C) short-term rates will rise in the future. D) short-term rates will fall in the future.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter13: Inflation

Section: Chapter Questions

Problem 12SQ

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If long-term interest rates are 8% and short-term interest rates are 3%, the market expects that:
	A)	short-term rates will remain the same in the future.
	B)	there is no relationship between long-term and short-term rates.
	C)	short-term rates will rise in the future.
	D)	short-term rates will fall in the future.