An Inverted Yield Curve Would Suggest That

question 24

Multiple Choice

An inverted yield curve would suggest that

• A) interest rates are expected to rise.
• B) interest rates are expected to fall.
• C) inflation is expected to rise in the future.
• D) long-term rates are being pushed up by Federal Reserve policy.

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Definitions:

Additive Manufacturing

A method that involves building items by depositing material in successive layers, widely referred to as 3D printing.

Fixed Set-Up Costs

Initial costs that do not vary with the level of production or sales, such as equipment purchases or facility leases, needing to be paid before production starts.

Economies of Scale

The savings businesses gain from operating at a larger scale, where the expense for each unit produced diminishes as the scale enlarges.

Short Run

A period in which at least one input in the production process is fixed, limiting the ability of a firm to adjust to changes in market demand.