Upward-sloping yield curves result from higher future inflation expectations, lender preferences for shorter maturity loans, and greater supply of short-term as opposed to long-term loans relative to their respective demand.

Question

Quizplus · Accepted Answer

This is correct, as an upward-sloping yield curve occurs when short-term interest rates are lower than long-term interest rates due to higher inflation expectations, lender preferences for shorter maturity loans, and a greater supply of short-term loans relative to demand.

Upward-Sloping Yield Curves Result from Higher Future Inflation Expectations, Lender