What happens to bond prices when the interest rate decreases?
a) They would decrease.
b) They would increase.
c) They would stay the same.
d) They would fluctuate based on the quantity of money.
Ans: b) They would increase.
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The quantity of employment is determined in the ________ market and that quantity, along with the ________, determines potential GDP
A) labor market; tax rate B) loanable funds; production function C) goods and services; labor market D) labor market; tax wedge E) labor market; production function
With the policy rate set at zero, the rise in expected inflation will lead to a ________ in the real interest rate, which will cause investment spending and aggregate output to ________
A) fall; rise B) fall; fall C) rise; rise D) rise; fall
In order to qualify for unemployment insurance and worker's compensation, a person must have
a. paid taxes the previous year b. an employment record c. a family of four d. food stamps e. a driver's license
One reason that we might observe a rise in net capital outflow could be interest rates in the:
A. rest of the world are declining, relative to the U.S. B. U.S. are declining, relative to the rest of the world. C. U.S. and the world are all declining. D. U.S. and the world are all increasing.