When there is an excess supply of money, bond prices

Question

Quizplus · Accepted Answer

An excess supply of money means that there is more money available in the market than there are buyers for it. This leads to an increase in demand for bonds, as investors look to invest their excess money. When the demand for bonds increases, their prices go up. Therefore, bond prices will rise when there is an excess supply of money. The price of money will fall since there is excess money available in the market, which reduces its value.

When There Is an Excess Supply of Money, Bond Prices