is FALSE? The plot of the relationship between the investment risk and the interest rate is called the yield curve. Each of the last seven recessions in the United States was preceded by a period with an inverted yield cu The nominal interest rate does not represent the increase in purchasing power that will result from investi A risk-free cash flow received in two years should be discounted at the two-year interest rate.
Functions of the Federal Reserve System
The Federal Reserve System looks after the financial activities and operations of the banking system. It is the apex body that has complete control over the banking regulations. All the guidelines regarding the banking system, money supply, and formulation of the monetary policy come under the purview of the Federal Reserve System. The New York Fed also helps in drafting the monetary policy and supervising the financial system.
Elastic and Inelastic Markets
Measuring the change in percentage of an economic variable with respect to change in a different economic variable is known as elasticity. This change in percentage results in a change in price concerning changes in other factors. In simple terms, when one factor brings a change to another factor, it is called elasticity.
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