When an economic expansion has been going on for several years, you are likely to observe that
A)the yield curve is sharply upward sloping.
B)the yield curve is somewhat upward sloping.
C)the yield curve is flat or inverted.
D)the yield curve is a vertical straight line.

Question

Quizplus · Accepted Answer

When an economic expansion has been going on for several years, you are likely to observe that the yield curve is somewhat upward sloping. This is because long-term interest rates tend to rise more slowly than short-term interest rates during an expansion, as investors expect the economy to continue to grow and inflation to remain low.

When an Economic Expansion Has Been Going on for Several