Which of the following is NOT a likely impact on the bond market if corporations become convinced that a robust economic recovery is underway?
A) increased demand for bonds
B) increased supply of bonds
C) lower bond prices
D) higher interest rates

Question

Quizplus · Accepted Answer

When corporations are convinced that a robust economic recovery is underway, they are more likely to invest in expansion and projects, leading to an increased supply of bonds to finance these investments. This scenario typically results in higher interest rates to attract investors to the new bonds and lower bond prices as the supply of bonds increases. Therefore, an increased demand for bonds is not a likely impact, as the focus shifts to issuing more bonds rather than buying them.

Which of the Following Is NOT a Likely Impact on the Bond