Explain “term structure” and below theories of yield curve

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.

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.