Long-Term Interest Rates Will Be ______ Relative to Short-Term Interest

Multiple Choice

Long-term interest rates will be ______ relative to short-term interest rates if

A) high; people expect the Federal Reserve to decrease short-term rates in the future.
B) high; people expect the Federal Reserve to increase short-term rates in the future.
C) low; people expect the Federal Reserve to increase short-term rates in the future.
D) low; people expect the Federal Reserve to decrease long-term rates in the future.