Cumulative Effect
What do you mean by the term Cumulative Effect?
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The Cumulative Effect:
• It shows the cumulative effect of the 3 economic factors which influence the shape of the yield curve: the real rate of interest, the inflation premium, and the interest rate risk premium.
• In a period of economic growth, both the real rate of interest and the inflation premium tend to rise monotonically over time.
• In a period of contraction, both real rate of interest and the inflation premium reduce monotonically over time.
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Elucidate the central problems of an economy: A) What to produce? B) How to produce? C) For whom to produce? Answer: Discover Q & A Leading Solution Library Avail More Than 1447572 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads No hassle, Instant Access Start Discovering 18,76,764 1931760 Asked 3,689 Active Tutors 1447572 Questions Answered Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!! Submit Assignment
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