How Do Trends in Bond Interest Rates Help Predict Changes

question 121

Multiple Choice

How do trends in bond interest rates help predict changes in the business cycle?

• A) When long-term rates are higher than short-term rates, a recession is likely.
• B) When long-term rates are lower than short-term rates, a recession is likely.
• C) When long-term rates are higher than short-term rates, a trough is present.
• D) When long-term rates are lower than short-term rates, an expansion is likely.

---

Definitions:

Productivity Feedback

The process of providing information to individuals or teams about their performance effectiveness for the purpose of improving work output.

Negative Feedback

Constructive criticism or adverse information communicated to an individual or group to encourage improvement.

Force-Field Analysis

A management technique developed by Kurt Lewin used to plan and implement change, identifying all the factors for and against a decision.

Group Perceptions

Collective beliefs or opinions held by members of a group towards certain issues, events, or situations.