If a Previously Upward-Sloping Yield Curve Starts to Flatten Out

question 42

Multiple Choice

If a previously upward-sloping yield curve starts to flatten out and eventually becomes downward sloping, what would you expect?

• A)stock values are likely to go up
• B)interest rates are likely to go up
• C)the economy is likely to enter a boom
• D)the economy is likely to enter a recession
• E)none of the above

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Definitions:

Free Energy

A thermodynamic quantity representing the amount of energy in a system that is available to do work.

Exergonic

A process that releases energy to its surroundings, typically in the form of work or heat.

High Energy Bond

A bond, typically found between phosphate groups in ATP, that releases a significant amount of energy when broken, commonly used in cellular processes.

Phosphate Groups

Functional groups consisting of a phosphorus atom covalently bonded to four oxygen atoms, important in energy transfer and molecular structure of nucleic acids.