SIE practice questionmediumEconomic Indicators – Yield Curve
If the yield curve inverts (short-term rates exceed long-term rates), what might this indicate about future economic activity?
- APotential recession✓ Correct answer
- BStrong economic expansion
- CStable interest rates
- DLow unemployment
Explanation
Why A — Potential recession
An inverted yield curve is a classic signal that markets expect a recession. It does not signal expansion, stable rates, or directly relate to unemployment.
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