Figure 141: BAA and 10-Year Bonds, 2006-2010

Multiple Choice

Figure 14.1: BAA and 10-Year Bonds, 2006-2010
-In Figure 14.1 above, the 10-year bond yield is considered ________, while the BAA bond yield represents ________.

A) the federal funds rate; the financial friction
B) the saving rate; the lending rate
C) the financial friction; the prime lending rate
D) a risk-free interest rate; a relatively risky interest rate
E) inflation; the M1 money growth rate