SIE practice questionmediumEconomic Indicators—Yield Curve
An inverted yield curve most commonly indicates which future economic condition?
- AEconomic expansion
- BUpcoming recession✓ Correct answer
- CRising interest rates
- DInflation spike
Explanation
Why B — Upcoming recession
An inverted yield curve is a strong predictor of recession. Economic expansion is typical of a normal upward-sloping curve. Rising rates or inflation are not specifically indicated.
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