When the government raises the interest rates on the bonds that it offers what must private businesses do?

Question

Quizplus · Accepted Answer

When the government raises interest rates on bonds, it becomes more expensive for companies to borrow money. To offset these costs, private businesses will raise the rates they offer on their corporate bonds to attract investors and keep costs low. This also allows them to continue funding their operations and investments. Selling corporate assets or raising prices may not be feasible options for all businesses. Cutting rates on their corporate bonds would also result in a loss of revenue, so raising rates is the best choice.

When the Government Raises the Interest Rates on the Bonds