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When Long-Term Interest Rates Are Higher Than Short-Term Rates, as They

Question 147

Multiple Choice

When long-term interest rates are higher than short-term rates, as they were in 2010, it:


A) implies that short-term interest rates are expected to fall.
B) has no implication for short-term interest rates.
C) implies that inflation will fall.
D) implies that short-term interest rates are expected to rise.

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