How is the price of a financial asset, such as government bonds, related to the interest rate?
What will be an ideal response?
The price of financial assets, such as government bonds, is negatively related to the interest rate. If the interest rate rises, the price of government bonds falls and if the interest rate falls, the price of government bonds rises.
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An increase in the working-age population results in a
A) rightward shift of demand for labor curve and an increase in potential GDP. B) rightward shift of the demand for labor curve and no change in potential GDP. C) rightward shift of the supply of labor curve and an increase in potential GDP. D) leftward shift of the supply of labor curve and a decrease in potential GDP.
A production function in which the inputs are perfectly substitutable would have isoquants that are
A) convex to the origin. B) L-shaped. C) linear. D) concave to the origin.
The difference between nominal GDP and real GDP is that:
A. real GDP accounts for foreign production in a country and nominal GDP does not. B. nominal GDP adjusts the value of goods for changes in the price level and real GDP does not. C. real GDP adjusts the value of goods for changes in the price level and nominal GDP does not. D. nominal GDP accounts for foreign production in a country and real GDP does not.
Monetary policy is ________ it was in the past ________ the income effect of an interest rate change on consumption has increased.
A. more effective than; even though B. more effective than, because C. equally effective as; even though D. less effective than; because