the economics of money, banking, and financial markets

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4. 
   

   Typically, yield curves are ____.
   A) gently upward sloping
   B) mound shaped
   C) flat
   D) bowl shaped
   Answer: A
   Diff: 1 Type: MC Page Ref: 118
   Skill: Recall
   Objective List: 6.2 Explain how interest rates on bonds with different maturities are related

   
   


5. 
   

   When yield curves are steeply upward sloping, ____.
   A) long-term interest rates are above short-term interest rates
   B) short-term interest rates are above long-term interest rates
   C) short-term interest rates are about the same as long-term interest rates
   D) medium-term interest rates are above both short-term and long-term interest rates
   Answer: A
   Diff: 2 Type: MC Page Ref: 118
   Skill: Recall
   Objective List: 6.2 Explain how interest rates on bonds with different maturities are related

   
   


6. 
   

   When yield curves are flat, ____.
   A) long-term interest rates are above short-term interest rates
   B) short-term interest rates are above long-term interest rates
   C) short-term interest rates are about the same as long-term interest rates
   D) medium-term interest rates are above both short-term and long-term interest rates
   Answer: C
   Diff: 2 Type: MC Page Ref: 118
   Skill: Recall
   Objective List: 6.2 Explain how interest rates on bonds with different maturities are related

   
   


7. 
   

   When yield curves are downward sloping, ____.
   A) long-term interest rates are above short-term interest rates
   B) short-term interest rates are above long-term interest rates
   C) short-term interest rates are about the same as long-term interest rates
   D) medium-term interest rates are above both short-term and long-term interest rates
   Answer: B
   Diff: 2 Type: MC Page Ref: 118
   Skill: Recall
   Objective List: 6.2 Explain how interest rates on bonds with different maturities are related