Understanding an Upward-Sloping Yield Curve

An investor is analyzing the yield curve for a specific set of government bonds. The yield curve is typically upward-sloping, indicating that longer-term bonds have higher yields compared to shorter-term bonds. This phenomenon can be attributed to several factors, such as expectations of future interest rates and inflation.

Given the information about the yield curve, which of the following statements about the term structure of interest rates is most accurate?