If investors expect interest rates to fall significantly in the future,the yield curve will be inverted. This means that the yield curve has a ________ slope.
A)steep upward
B)slight upward
C)flat
D)downward

Question

Quizplus · Accepted Answer

An inverted yield curve means that short-term interest rates are expected to be higher than long-term interest rates. This suggests that investors anticipate a decline in inflation and economic growth over the long-term, leading to lower interest rates. As a result, the yield curve will have a downward slope.

If Investors Expect Interest Rates to Fall Significantly in the Future,the