An increase 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

An increase in the liquidity of corporate bonds makes them more attractive to investors, shifting the demand curve for corporate bonds to the right as they are now more desirable. This increased attractiveness of corporate bonds can make Treasury bonds less appealing in comparison, potentially shifting the demand curve for Treasury bonds to the left as investors may prefer the now more liquid corporate bonds over Treasury bonds.

An Increase in the Liquidity of Corporate Bonds,other Things Being