If the level of inflation is expected to ____, there will be ____ pressure on interest rates and ____ pressure on the required rate of return on bonds.

Question

Quizplus · Accepted Answer

When inflation is expected to increase, lenders demand higher interest rates to compensate for the decreased purchasing power of future interest payments, leading to upward pressure on both interest rates and the required rate of return on bonds.

If the Level of Inflation Is Expected to ____, There