When yield curves are steeply upward sloping
A)long-term interest rates are above short-term interest rates.
B)short-term interest rates are above long-term interest rates.
C)short-term interest rates are about the same as long-term interest rates.
D)medium-term interest rates are above both short-term and long-term interest rates.

Question

Quizplus · Accepted Answer

Steep upward-sloping yield curves indicate that long-term interest rates are higher than short-term interest rates. This is because lenders demand higher compensation for lending their money for a longer period of time.

When Yield Curves Are Steeply Upward Sloping