Yield curve relating to expansive / restrictive fiscal / monetary policies.
in Book 3 of Schweser page 42, there’s a question asking the likely scenario of restrictive and expansive policies.
Basically item set tells you that the yield curve is flat; ask you to determine the policies. If I remember correctly in the book 2; Schweser says restrictive fiscal policy together + expansive monetary policy => slightly downward sloping yield curve. While the restive monetary policy + expansive fiscal policy => more or less flat yield curve?
So shouldn’t the flat yield curve imply the latter combination: expansive fiscal + restrictive monetary?
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