An Unusually Steep Yield Curve Suggests That

question 39

Multiple Choice

An unusually steep yield curve suggests that:

• A)short-term interest rates are expected to rise.
• B)short-term interest rates are expected to fall.
• C)the economy is headed for a recession.
• D)long-term interest rates will rise.

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Definitions:

Fixed Cost

Expenses that do not change with changes in the volume of production or sales, such as rent, salaries, and insurance.

Variable Cost

A variable cost changes in direct proportion to the level of production or activity in a business, such as materials and labor.

Marginal Cost

The additional expense incurred from generating one more unit of a product or service.

Total Fixed Costs

The total of all expenses that stay unchanged no matter the amount of production or output.