What do you mean by yield curve, Macroeconomics

Assignment Help:

Q. What do you mean by yield curve?

Yield curve is a graph of interest rates of different maturity (recalculated to yearly rates) at a specific point in time. It's common for the yield curve to slope upwards (interest rates with longer maturity are normally higher than those with a shorter maturity). Reason for this is that there is a higher demand for loans with longer maturity owing to the decreased uncertainty. Many borrowers are prepared to pay a premium to avoid fluctuations in the interest rates.

As discussed above, if market expects higher interest rates then slope of the yield curve would increase. Though not very common, slope may be negative if market expects the interest rates to fall more than premium on longer rates.


Related Discussions:- What do you mean by yield curve

Describe in detail about exchange rate systems, Describe in detail about Ex...

Describe in detail about Exchange rate systems Various countries have different exchange rate systems. The most significant characteristic of an exchange rate system is to what

Income elasticity, If 5000 units are sold and income increases by 20% with ...

If 5000 units are sold and income increases by 20% with an income elastiticy of +2, what will the number of sales units be after the increase

Price elasticity of demand, Suppose that quantity demand falls by 30% as a ...

Suppose that quantity demand falls by 30% as a result of a 5% increase in price. What would be the price elasticity of demand for this good?

GDP, BENEFITS OF GDP

BENEFITS OF GDP

Calculate the total cost and minimum cost, Consider a hospital that produce...

Consider a hospital that produces output (Q) and has two production inputs, nurse-hours (N) and beds (B). the hospital faces input costs of W N = 15 and W B = 25. Assume the h

Economics of scale exist, This economics of scale exist for all of the foll...

This economics of scale exist for all of the following reasons except: a. bureaucratic inefficiencies b. management problems c. failures in information flows d. firm size is to

Describe how exchange rate is expressed, Describe how exchange rate is expr...

Describe how exchange rate is expressed in some nation In some nations, exchange rate is expressed using home currency as base currency. In UK for instance, Danish exchange rat

Equilibrium in the labor market, Q. Equilibrium in the labor market? E...

Q. Equilibrium in the labor market? Equilibrium in the labor market  Real wage W/P will be equal to the equilibrium real wage in the classical model

How do you explain gni per capita, To determine of the wealth is earned by ...

To determine of the wealth is earned by nations by economic activates all around the globe. Gross National Income comprises the total value of goods and services formed within a

How do tax cuts affect the economy, Tax cuts get better the economy by givi...

Tax cuts get better the economy by giving the people more spending power and higher consumer confidence, which leads to them spending more of all of their income which lead to more

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd