Introduce the concept of the yield curve and its relevance in economic activities in the Caribbean. Explain each of the four Modern Theories of Interest Rates (Pure Expectations Theory, Liquidity Preference Theory, Market Segmentation Theory, Preferred Habitat Theory) with examples from the Caribbean region. Compare and contrast the assumptions and implications of each theory in explaining interest rate dynamics in the context of the Caribbean.

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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  • Introduce the concept of the yield curve and its relevance in economic activities in the Caribbean.
  • Explain each of the four Modern Theories of Interest Rates (Pure Expectations Theory, Liquidity Preference Theory, Market Segmentation Theory, Preferred Habitat Theory) with examples from the Caribbean region.
  • Compare and contrast the assumptions and implications of each theory in explaining interest rate dynamics in the context of the Caribbean. 
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