Why might the above relationship signal a recession

Assignment Help Econometrics
Reference no: EM131136272

Suppose you observe that short-term interest rates are higher than long-term interest rates.

a. What expectations must people have regarding future interest rates?

b. Why might the above relationship signal a recession? Why might it not?

c. What will the yield curve for this problem look like?

Reference no: EM131136272

Questions Cloud

Calculate rate at which gnp was falling from 1929 to 1931 : How does that rate compare with the rate at which real GDP fell during the 1990-1991 recession?
Discuss the top-three physical security controls : Imagine you are in charge of designing physical security controls for your employer, which operates out of a multitenant office building. Discuss the top-three physical security controls that you believe need to be implemented in order to secure t..
Communication competence : An important theme throughout this course has been communication competence, which is the ability to choose a communication behavior that is both effective and appropriate for a given situation.
How you think the it profession will change in the future : Analyze how you think the IT profession will change in the future, based on your current understanding of IT as a profession. In your analysis, explain where you think the IT profession (in general) will be in 10, 20 and 50 years from now. Also, e..
Why might the above relationship signal a recession : Why might the above relationship signal a recession? Why might it not?
Discuss the difference between violence and protest : Contrast the differing opinions between liberals and conservatives in regard to the policy of grants-in-aid. Discuss the difference between violence and protest
Compute orientation of the principal axes of cross section : Compute the orientation of the principal axes of the cross section using the eigen- value solver in MATLAB (eig) on the moment of inertia matrix J. See the CP Notes for more information on this task.
What barriers had to be broken down for the civil rights : Explain how the decision reached in Brown vs. Board of Education impacted the Civil Rights movement led by Dr. Martin Luther King, Jr, and how this in turn resulted in greater equality for African Americans. What barriers had to be broken down f..
Description as the chief method of development : Write a 500-750 word essay using description as the chief method of development. Follow the guidelines for formatting as described in Notes on Writing a Descriptive Essay.

Reviews

Write a Review

Econometrics Questions & Answers

  Determine the equivalent cost per month at an interest

Copper Refiner Phelps Dodge purchased a model MTVS peristaltic pump for injecting antiscalant at ite nanofitration water conditioning plant. The cost of the pump was $950. If the chemical cost is $10 per day, determine the equivalent cost per mont..

  Show effects of innovation on the market price and quantity

To quell outrage over tuition increases, the collage places $55 limit on the price of textbooks. How many textbooks will be sold now C. while the price limit is still in effect, automated publishing increases the efficiency of textbook production.

  What fraction of the calls last more than 4 minutes

A study of long distance phone calls made from the corporate offices of Pepsi Bottling Group, Inc., in Somers, New York, revealed the length of the calls, in minutes, follows the normal probability distribution.

  Derive the short-run market supply curve

Suppose that there are 80 firms in a market, each with the following cost function: C(q) = 100 + 4q^2 A.) Derive the short-run market supply curve. B.) Suppose the market demand is Qd= 1280 - 30P Find the equilibrium market quantity and price.

  Explain problems of adverse selection in rural credit market

Suppose instead that you (the lender) have no information on the type of borrower and you have to charge a single interest rate to all borrowers. Also assume that the probability that you will end up with each type of borrower is equal (e.g. 1/3 ..

  Compute the profit-maximizing price and quantity

Compute the profit-maximizing price and quantity, and illustrate with a complete graph.

  A company is considering replacing a painting machine

a company is considering replacing a painting machine purchased 9 years ago for 700000. it has a market value today of

  Ricardian equivalence and fiscal policy

Consider again an increase in government spending combined with an increase in taxes of the same amount. How does this output effect compare to the output effects in parts (a) and (b)?

  Find nominal gdp price index

The following table shows nominal GDP and an appropriate price index for a group of selected years. Compute real GDP, and indicate in each calculation whether you are inflating or deflating the nominal GDP data.

  Whats the produced to maximize profits or minimize losses

TP TFC TVC 0 $45 $01 45 170 2 45 320 3 45 450 4 45 620 5 45 800 6 45 ..

  1 john davis a recent ie graduate from tennessee

1. john davis a recent ie graduate from tennessee technological university bought an suv for 30000 with a down payment

  What will be new equilibrium price and quantity compared

Assume that demand for a commodity is represented by the equation P = 10 - 0.2 Q d, and supply by the equation P = 2 + 0.2 Qs where Qd and Q s are quantity demanded and quantity supplied, respectively, and P is the Price. Use the equilibrium condi..

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