When a yield curve has a negative slopeGroup of answer choicesthe money market is expecting default by issuers of bank bills.the inflation rate is expected to rise.short-term yields are higher than long-term yields.long-term yields are higher than short-term yields.

1. The yield curve is generally upward sloping. That is, interest rates on government bonds increase with the term to maturity of such bonds. Why? Occasionally, the yield curve is inverted. That is, interest rates on government bonds with longer terms to maturity are lower than the interest rates on government bonds with shorter terms to maturity. Why? Give answer from economics perspective in bullet points.

At any time, the slope of the yield curve is affected by:Select one:a.inflationary expectations.b.liquidity preferences.c.the comparative equilibrium of supply and demand in the short-term and long-term market segments.d.Both a and c are correct.e.All a, b and c are correct.

The existence of an upward-sloping yield curve suggests that:Select one:a.bonds should be selling at a discount to par value.b.bonds will not return as much as common stocks.c.interest rates will be increasing in the future.d.real interest rates will be increasing soon.

The money demand curve is downward sloping because lower interest​ rates: a. lower the opportunity cost of holding money and cause households and firms to switch from financial assets to money. b. raise the opportunity cost of holding money and cause households and firms to switch from money to bonds. c. lower the opportunity cost of holding money and cause households and firms to switch from money to financial assets. d. raise the opportunity cost of holding money and cause households and firms to switch from money to shares.

If a yield curve looks like the one shown in the figure below, what is the market predictingabout the movement of future short-term interest rates? What might the yield curveindicate about the market’s predictions for the inflation rate in the future?