If We Compare the Yield Curve in January, 1981 with the Yield

question 50

Multiple Choice

If we compare the yield curve in January, 1981 with the yield curve in January, 2013, we see that

• A)they are both downward-sloping, since both were years in which we had a recession
• B)they were both upward-sloping since both years had strong growth
• C)interest rates were expected to go up in 1981 due to high inflation
• D)interest rates were expected to go down in 2010 due to low inflation
• E)1981 was an unusual year, showing a downward-sloping yield curve

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