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Suppose We Observe Bond Prices Decreasing

Question 53

Multiple Choice

Suppose we observe bond prices decreasing. A probable cause of this is


A) the Fed increasing the discount rate, causing other interest rates to increase and a fall in bond prices.
B) the Fed decreasing the discount rate, causing other interest rates to decrease and a fall in bond prices.
C) the Fed selling bonds in the open market.
D) the Fed buying bonds in the open market.

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