If the Federal Reserve Surprises Investors by Announcing an Easing

question 57

Multiple Choice

If the Federal Reserve surprises investors by announcing an easing of monetary policy:

• A) it should have no impact on the slope of the yield curve.
• B) we should expect the yield curve to possibly become inverted.
• C) the yield curve would flatten.
• D) we should expect the yield curve to steepen.

---

Definitions:

Balanced Die

A die that is perfectly symmetrical in shape and mass distribution, ensuring that each face has an equal chance of landing up when thrown.

Even Number

An Even Number is an integer that can be divided exactly by 2, without leaving a remainder.

Long Term

Refers to a period that extends over a significant length of time, often implying stability or commitment in financial, strategic, or planning contexts.

Mutually Exclusive

Describes two or more events that cannot occur at the same time in a given experiment or situation.