A negatively sloped yield curve suggests
1. short-term rates exceed long-term rates
2. long-term rates exceed short-term rates
3. the Federal Reserve is following a tight monetary policy
4. the Federal Reserve is following an easy monetary policy

Question

A negatively sloped yield curve suggests  
1. short-term rates exceed long-term rates
2. long-term rates exceed short-term rates
3. the Federal Reserve is following a tight monetary policy
4. the Federal Reserve is following an easy monetary policy

Quizplus · Accepted Answer

A negatively sloped yield curve indicates that short-term interest rates are higher than long-term rates, which can be a result of the Federal Reserve tightening monetary policy to control inflation or other economic concerns.

A Negatively Sloped Yield Curve Suggests