单选题 If the slope of the yield curve begins to rise sharply, it is usually an indication that: A. the rate of inflation is starting to increase or is expected to do so in the near future. B. stocks are offering abnormally high rates of return. C. the Fed has been aggressively driving up short-term interest rates.

【正确答案】 A

【答案解析】According to the expectations hypothesis, higher long-term interest rates and, therefore, up-ward-sloping yield curves will occur if the rate of inflation starts to heat up or is expected to do so in the near future.