Current Affairs Question - 02 April 2019

Consider the following statements:

1. Ideally short term bonds pay more interest rate compared to long term bonds.
2. There is a proportional relationship between bond yield & maturity period in case of a normal yield curve.

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Inverted Yield Curve generally signifies?

Consider the following statements with respect to the Phillip’s Curve:

1. It represents inverse relationship between inflation rate and unemployment rate.
2. It says that high levels of employment can be achieved only at high levels of inflation.

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Phillip’s Curve can be used in which of the following?

1. To plan monetary policy
2. Central bank to keep eye on inflation
3. Help the government to access the situation of unemployment in the country

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Consider the following statements about ‘Laffer Curve’:

1. Its nature is hyperbolic when plotted between total revenue (Y-axis) & tax rate (X-axis).
2. If tax rate is lower than the optimal value. Increasing the tax rate will lead to less revenue.
3. The slope of the curve is positive in the region of tax rate more than the optimal value.

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