Holding everything else constant,if interest rates are expected to increase,the demand for bonds ________ and the demand curve shifts ________.
A)increases;right
B)decreases;right
C)increases;left
D)decreases;left

Question

Quizplus · Accepted Answer

If interest rates are expected to increase, investors will demand fewer bonds, as they can earn higher returns elsewhere. Hence, the demand for bonds decreases and the demand curve shifts leftward.

Holding Everything Else Constant,if Interest Rates Are Expected to Increase,the