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An Increase in the Spread Between Interest Rates On10-Year Bonds

Question 165

Multiple Choice

An increase in the spread between interest rates on10-year bonds of Italy and Spain and interest rates on 10-year bonds of Germany indicates:


A) an increasing probability of a liquidity trap in Italy and Spain.
B) an increasing probability of a liquidity trap in Germany.
C) a perception of increasing risk in Italy and Spain.
D) a perception of decreasing risk in Italy and Spain.

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