Which yield curve is most likely linked to a booming economy?

A yield curve illustrates the relationship between interest rates and the time to maturity for debt securities of comparable risk. In a booming economy, it is common to observe a normal upward-sloping yield curve. This configuration indicates that longer-term securities offer higher yields compared to short-term ones.

In a thriving economic environment, there is typically increased demand for credit, leading to higher interest rates as borrowers compete for loans. This situation usually contributes to higher inflation expectations, which also influences long-term rates to rise. An upward-sloping curve reflects the market's anticipation of future growth, encouraging investors to seek higher returns for the increased risk associated with longer maturities.

The choice linked to a booming economy would therefore likely demonstrate this upward-sloping characteristic. The selected option effectively represents this representation of economic optimism, where yields increase in response to the projected growth and inflation.