MingLu Case Scenario (Topic Test - Econ)

Question # 6 assumes you have TIGHT monetary and TIGHT fiscal policy. This would lead to an inverted curve. You would NOT get a flat yield curve from this because interest rates are high and taxes are high.

If you want a FLAT yield curve, you want a TIGHT monetary policy and LOOSE fiscal policy right. I believe this is right.

So if you look at question 6 here my answer is B “In correct with regards to monetary policy” but it says that the correct answer is C which is “in regards to fiscal”

So if you have TIGHT monetary policy and LOOSE fiscal policy, wouldn’t the yield curve be moderately steep?

Never mind I read it wrong. Sorry guys.