The price of bonds and the interest rate are
A. inversely related.
B. positively related.
C. related, but we are not sure how.
D. unrelated.
Answer: A
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Which term refers to a legally established maximum price that firms may charge?
A) a tariff B) a price ceiling C) a price floor D) a subsidy
The imposition of a per unit tax on a product
A) will cause the supply curve to shift downward and to the right. B) will cause the supply curve to shift upward and to the left. C) will reduce the quantity supplied of the product. D) will encourage producers to increase the quantity supplied of the product.
The consumption function is the relationship between
A. real consumption spending and real saving. B. real consumption spending and real taxes. C. real consumption spending and investment spending. D. real consumption spending and real disposable income.
The average expected rate of return of a financial asset equals:
A. the rate that compensates for time preference plus the rate that compensates for risk. B. the rate that compensates for time preference plus the rate of inflation. C. beta plus the rate that compensates for risk. D. the risk-free interest rate plus the rate of inflation.