Question:

A negatively sloped yield curve suggests that

A.

short-term rates exceed long-term rates, and the Federal Reserve is following a tight monetary policy

B.

short-term rates exceed long-term rates, and the Federal Reserve is following an easy monetary policy

C.

long-term rates exceed short-term rates, and the Federal Reserve is following a tight monetary policy

D.

long-term rates exceed short-term rates, and the Federal Reserve is following an easy monetary policy

Answer» a. short-term rates exceed long-term rates, and the Federal Reserve is following a tight monetary policy