I'm a little confused on this one. Is steepening the same as the short-term rates increasing? I'll have to review my notes to make sure I understand the relationship between the short and long-term rates.
Okay, I remember learning about this in class. I'm pretty sure the answer is B) rises, since steepening the yield curve means the short-term rates are increasing relative to the long-term rates.
Hmm, I think this has to do with the yield curve and how the short-term and long-term rates are related. I'll need to think through the different scenarios to determine which one makes the most sense.
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