If Investors Expect Interest Rates to Fall Significantly in the Future,the

question 2

Multiple Choice

If investors expect interest rates to fall significantly in the future,the yield curve will be inverted. This means that the yield curve has a ________ slope.

• A)steep upward
• B)slight upward
• C)flat
• D)downward

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Definitions:

Checking Deposits

Balances in bank accounts from which funds can be withdrawn by writing a check or using a debit card, usually without any interest benefits.

Financial Intermediaries

Institutions that act as middlemen in financial transactions, typically between savers and borrowers.

Commercial Banks

Financial institutions that offer a wide range of services to businesses and consumers, including deposit accounts, loans, and money transfers.

Minimum Balance

The smallest amount that must be maintained in a bank account to avoid penalties, such as service charges.