When an economy faces an inverted yield curve, compared to short-term bonds, the long-term bonds:
A)are riskier.
B)pay lower interest rates.
C)pay higher interest rates.
D)are a safe investment.

Question

Quizplus · Accepted Answer

An inverted yield curve occurs when long-term bonds have lower interest rates than short-term bonds, indicating investors' expectations of a future economic slowdown.

When an Economy Faces an Inverted Yield Curve, Compared to Short-Term