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Basic Question 8 of 10

Which factors can cause the neutral policy rate to change?

I. The level of real economic growth
II. The expected volatility of real economic growth
III. The target inflation rate
IV. The output gap
V. The expected inflation rate

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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz

Learning Outcome Statements

explain how the phase of the business cycle affects policy and short-term interest rates, the slope of the term structure of interest rates, and the relative performance of bonds of differing maturities;

describe the factors that affect yield spreads between non-inflation-adjusted and inflation-indexed bonds;

CFA® 2025 Level II Curriculum, Volume 6, Module 37.