When the coupon rate on newly issued bonds decreases relative to older, outstanding bonds, what happens?
A) Older bonds will sell for more than their face value.
B) Older bonds can still be sold at their face value.
C) The market price of the older bond falls in the secondary market.
D) The market price of the older bond rises in the secondary market.
D
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Why is the production possibilities frontier bowed out?
What will be an ideal response?
If workers and firms ignore inflation or form their inflation expectations adaptively, expansionary monetary policy will lower unemployment permanently
Indicate whether the statement is true or false
If the Fed decreases the money supply, the interest rate
a. decreases and aggregate spending increases. b. decreases and aggregate spending decreases. c. increases and aggregate spending decreases. d. increases and aggregate spending increases. e. increases and money demand decreases.
According to the Keynesian consumption function, an increase in disposable income will result in
A) a decrease in consumption. B) an increase in consumption. C) a decrease in investment. D) an increase in investment.