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Suppose the yield curve is upward sloping. According to the expectations theory of the yield curve and its common interpretation as a business cycle indicator:
Suppose the yield curve is upward sloping. According to the expectations theory of the yield curve and its common interpretation as a business cycle indicator:
a. The Fed will raise short-term rates in the future to fight inflation.
b.The Fed will decrease short-term rates in the future to reduce rising unemployment.
c. The Fed will decrease short-term rates in the future to reduce inflation.
d. The Fed will raise short-term rates in the future to reduce rising unemployment.
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