If inflation and interest rates become more volatile, what would you expect to see happen to the slope of the yield curve?
Answer to relevant QuestionsSuppose the risk premium on U.S. corporate bonds increases. How would the change affect your forecast of future economic activity, and why?The Federal Reserve Bank of St. Louis publishes a weekly index of financial stress (FRED code: STLFSI) that summarizes strains in financial markets, including liquidity problems. For the period beginning in 1994, plot this ...To raise wealth and stimulate private spending, suppose the central bank lowers interest rates, making stock market investment relatively attractive. Which stock market index would you monitor to judge the effectiveness of ...Consider again the stock described in Problem. What might account for the difference in the market price of the stock and the price you are willing to pay for the stock? Howwell does the stock market anticipate the behavior of the economy? Plot since 1950 the percentage change from a year ago of the Dow Jones Industrial Average. Is the index a reliable predictor of business cycle downward ...
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