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

Question

Quizplus · Accepted Answer

When the demand for bonds decreases, it means investors are not interested in buying bonds, and when the supply of bonds increases, it means there are more bonds available in the market. Both of these factors lead to a situation where there are more bonds available than investors want to buy, resulting in a decrease in the price of bonds.

When the Demand for Bonds ________ or the Supply of Bonds