The difference between the yield on 3-month Treasury bills and 10-year Treasury notes is largest typically during
A) recessions.
B) expansions.
C) periods of high inflation.
D) when the yield curve is inverted.

Question

Quizplus · Accepted Answer

The difference between the yield on 3-month Treasury bills and 10-year Treasury notes is typically largest during recessions. This is because, during recessions, short-term interest rates tend to fall more sharply than long-term rates as the central bank cuts rates to stimulate the economy, leading to a steeper yield curve.

The Difference Between the Yield on 3-Month Treasury Bills and 10-Year