When yield curves are downward 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

Downward sloping yield curves, also known as inverted yield curves, indicate that short-term interest rates are higher than long-term interest rates. This is often seen as a signal of a possible economic downturn or recession.

When Yield Curves Are Downward Sloping