A decrease in the liquidity of corporate bonds,other things being equal,shifts the demand curve for corporate bonds to the ________ and the demand curve for Treasury bonds shifts to the ________.
A)right;right
B)right;left
C)left;left
D)left;right

Question

Quizplus · Accepted Answer

A decrease in the liquidity of corporate bonds makes them less attractive to investors, causing a decrease in demand and a leftward shift of the demand curve. As investors seek more liquid and safer alternatives, the demand for Treasury bonds will increase, causing a rightward shift of the demand curve.

A Decrease in the Liquidity of Corporate Bonds,other Things Being