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Which of the following would be most likely to lead to a higher level of interest rates in the economy? O a. The level of
Which of the following would be most likely to lead to a higher level of interest rates in the economy? O a. The level of inflation begins to decline. O b. The Federal Reserve decides to try to stimulate the economy. O c. The economy moves from a boom to a recession. O d. Corporations step up their expansion plans and thus increase their demand for capital. O e. Households start saving a larger percentage of their income. The real risk-free rate is 3.25%. Inflation is expected to be 2.00% this year and 4.50% during the next 2 years. Assume that the maturity risk premium is zero. What is the yield on 2-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. % What is the yield on 3-year Treasury securities? Do not round intermediate calculations. Round your answer to two decimal places. %
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