The yield curve, as the term structure of interest rates is said to be normal when it is upward sloping. However, it is sometimes "inverted" and slopes downward. What arguments are made to explain why the yield curve is not simply a flat line?

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The Answer of The yield curve, as the term structure of interest rates is said to be normal when it is upward sloping. However, it is sometimes "inverted" and slopes downward. What arguments are made to explain why the yield curve is not simply a flat line?

The Yield Curve, as the Term Structure of Interest Rates