Cause parallel shift in the yield curve

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If the expectations hypothesis (EH) holds, why might the yield curve be:

(a) flat

(b) upward sloping

(c) downward sloping

What might cause a parallel shift in the yield curve?

The government implements a credible ‘tight’ monetary policy by raising short-term (e.g. 3-month) interest rates. Why might this result in a downward-sloping yield curve?

Reference no: EM131886504

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