All else equal, when the Federal Reserve Banks engage in an expansionary monetary policy, the interest rates received on government bonds usually
A) fall.
B) rise.
C) remain constant.
D) move in the same direction as the bonds' price.

Question

Quizplus · Accepted Answer

When the Federal Reserve Banks engage in an expansionary monetary policy, they increase the money supply in the economy, leading to lower interest rates. As a result, the interest rates received on government bonds usually fall.

All Else Equal, When the Federal Reserve Banks Engage in an Expansionary