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:

Galvanic Device

A device that generates electrical energy through the chemical reaction between different metals in an electrolyte.

Chemical Action

The process of substances interacting at a molecular level to produce a chemical change.

Specific Gravity

A measure of the density of a substance compared to the density of water, indicating how heavy or light the substance is relative to water.

Equal Volume

The condition or measurement where two or more containers or spaces contain the same amount of substance or material.