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What Does a Flat Yield Curve Imply, According to the Expectations

Question 40

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What does a flat yield curve imply, according to the expectations theory of the term structure of interest rates?


A) The price level will not change in the future.
B) Future long-term rates are expected to rise.
C) Future long-term rates are expected to fall.
D) Future short-term rates are not expected to change.

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