If you observe that the current yield curve is upward sloping, it is likely that
A)an economic expansion has just begun.
B)an economic expansion has been going on for several years.
C)a recession is about to begin.
D)a recession is nearly over.

Question

Quizplus · Accepted Answer

An upward sloping yield curve indicates that long-term interest rates are higher than short-term interest rates. This is typically seen during periods of economic expansion, as investors expect inflation to rise in the future and demand a higher return on their long-term investments.

If You Observe That the Current Yield Curve Is Upward