Question
1. List two interest rate spreads that can be used to gauge possible future economic growth. Outline how each works. 2. Outline the ways in
1. List two interest rate spreads that can be used to gauge possible future economic growth. Outline how each works.
2. Outline the ways in which FED easing affects the yield curve (include the theories of the yield curve as part of this). Is it possible for an increase in the real money supply (FED easing) to have exactly the opposite effect? Explain the basis for why this is or is not possible.
3. What is a "flight to safety?" Explain the underlying basis for how and why this occurs.
4. Do stock prices and interest rates tend to move in opposite or the same direction? Explain the basis for this
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