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According to the Expectations Theory, If Next Year's Expected Short-Term

Question 1

Multiple Choice

According to the expectations theory, if next year's expected short-term rate is below the current short-term rate,


A) the current long-term rate will be below the current short-term rate.
B) the current long-term rate will be above the current long-term rate.
C) the current long-term rate will be horizontal.
D) the current long-term rate will be vertical.

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