1. The real interest rates:

1. Is always greater than the inflation rates
2. Can go down to zero but not lower
3. Can go down to zero, stay positive or even be negative
4. Normally are higher than nominal rates

1. An upward sloping Treasury yield curve best indicates:
   1. Bonds with longer maturities should be selling at a discount rather than premium
   2. Bonds will not return as much as common stocks in an inflation
   3. Real interest rates will be increasing soon in response to economic recession
   4. Yields on Treasuries with shorter maturities will continue to rise