When the demand for bonds ________ or the supply of bonds ________,interest rates fall.
A) increases; increases
B) increases; decreases
C) decreases; decreases
D) decreases; increases

Question

Quizplus · Accepted Answer

When the demand for bonds increases, it means more people want to buy them, which typically leads to higher bond prices and lower yields (interest rates). Conversely, when the supply of bonds decreases, there are fewer bonds available for purchase, which can also lead to higher prices and lower yields due to the scarcity of available bonds.

When the Demand for Bonds ________ or the Supply of Bonds