If the yield curve has a steep upward slope, investors expect:
A) interest rates to increase and inflation rates to decrease.
B) interest rates to decrease and inflation rates to increase.
C) interest rates to increase and inflation rates to increase.
D) interest rates to decrease and inflation rates to decrease.

Question

Quizplus · Accepted Answer

A steep upward slope in the yield curve typically indicates that investors expect higher interest rates in the future, often due to anticipated economic growth and rising inflation.

If the Yield Curve Has a Steep Upward Slope, Investors