A Steep Upward-Sloping Yield Curve Indicates That Short-Term Interest Rates

question 105

Multiple Choice

A steep upward-sloping yield curve indicates that short-term interest rates are expected to

• A) neither rise nor fall in the near future.
• B) remain relatively unchanged, but that long-term rates are expected to fall.
• C) neither rise nor fall, but that long-term rates are expected to rise moderately.
• D) rise moderately in the near future.

---

Definitions:

Aggregate Supply Analyses

The assessment of the total supply of goods and services that firms in an economy plan on selling during a specific time period at different price levels.

Keynesian

Pertaining to the economic theories and policies of John Maynard Keynes, emphasizing the role of government intervention to ensure full employment and stable economies.

Classical

Pertaining to the school of economic thought that emphasizes free markets, free trade, and the idea that economies self-regulate through supply and demand.

John Maynard Keynes

A British economist whose theories on the influences of macroeconomic factors on economic output and government interventions shaped modern economics.