According to the Liquidity Preference Model of the Term Structure the term structure slopes upwards because (all else equal) short term bonds are more liquid than long term bonds and their higher liquidity raises short term bond prices and lowers short term bond interest rate. their higher liquidity lowers short term bond prices and lowers short term bond interest rate. their higher liquidity raises short term bond prices and raises short term bond interest rate. their higher liquidity lower short term bond prices and raises short term bond interest rate