Everything else held constant,an increase in the liquidity of bonds results in a ________ in demand for bonds and the demand curve shifts to the ________.
A)rise;right
B)rise;left
C)fall;right
D)fall;left

Question

Quizplus · Accepted Answer

An increase in liquidity means that it is easier to sell a bond and convert it into cash. This makes bonds more attractive and increases demand, causing the demand curve to shift to the right.

Everything Else Held Constant,an Increase in the Liquidity of Bonds