We are MOST likely to see a recession if interest rates on long-term bonds are
A) higher than interest rates on short-term bonds.
B) the same as interest rates on short-term bonds.
C) rising.
D) lower than interest rates on short-term bonds.

Question

Quizplus · Accepted Answer

When interest rates on long-term bonds are lower than those on short-term bonds, it often indicates an inverted yield curve, which is a predictor of economic recession. This inversion suggests that investors have little confidence in the near-term economy.

We Are MOST Likely to See a Recession If Interest