1. Explain “term structure” and below theories of yield curve

• Expectations Theory

• Liquidity Preference Theory

• The Preferred Habitat Theory

• Market Segmentation Theory

2. Explain “Friedman rule”

3. Explain “liquidity trap” and discuss the causes and consequences of it.

The homework on the topic QE. Below is the task:

Recommended reading for the homework: (not subject to the reading only, search and read more)

Chapter 4 Pilbeam, K. (2018). Finance & financial markets. Macmillan International Higher Education. (Links to an external site.)

Svensson, L. E. (2003). Escaping from a liquidity trap and deflation: The foolproof way and others. Journal of economic Perspectives, 17(4), 145-166. (Links to an external site.)

Word limit is 500 words excluding full reference list.