SIE practice questioneasyYield Curve - Economic Indicator
An inverted yield curve most commonly suggests which of the following economic expectations?
- ADeclining unemployment
- BRapid economic growth
- CHigh inflation
- DA potential recession✓ Correct answer
Explanation
Why D — A potential recession
An inverted yield curve (short-term rates higher than long-term) is often a signal of an upcoming recession, not growth or inflation. While it may be caused by growth or inflation fears, its most direct correlation is with recessions.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Economic Indicators questions
- Which feature is unique to Treasury Inflation-Protected Securities (TIPS)?
- Which economic indicator measures the average change over time in the prices paid by consumers for a basket of goods…
- A period characterized by high unemployment and high inflation is known as:
- The Federal Open Market Committee (FOMC) is responsible for: