Q1. An inverted yield curve always predicts a recession, which makes it a very reliable signal of future economic distress! True/False Q2. As pointed out in the lecture, the shape and magnitude of yields in the treasury yield curve has been remarkably consistent going back to 1989. True/False Q3. My favorite term structure theory is “expectations,” for obvious reasons. True/False
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.
Q1. An inverted yield curve always predicts a recession, which makes it a very reliable signal of future economic distress!
True/False
Q2. As pointed out in the lecture, the shape and magnitude of yields in the treasury yield curve has been remarkably consistent going back to 1989.
True/False
Q3. My favorite term structure theory is “expectations,” for obvious reasons.
True/False
Trending now
This is a popular solution!
Step by step
Solved in 4 steps