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MC Question 18

Which of the following statements is correct?

A. Governments may choose to raise interest rates so that the level of general expenditure in the economy will increase
B. The normal yield curve slopes upward to reflect increasing compensation to investors for being unable to use their cash now
C. The yield on long-term loan notes is lower than the yield on short-term loan notes because long-term debt is less risky for a company than short-term debt
D. Expectations theory states that future interest rates reflect expectations of future inflation rate movements

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