An unexpected fall in GDP growth should send bond prices __________ and stock prices __________.
A) up; up
B) up; down
C) down; up
D) down; down

Question

Quizplus · Accepted Answer

An unexpected fall in GDP growth typically leads to lower expectations for inflation and interest rates, which can cause bond prices to rise (as their yields fall). Conversely, it often signals weaker economic conditions, leading to lower earnings expectations for companies and thus, lower stock prices.

An Unexpected Fall in GDP Growth Should Send Bond Prices