Factors that can cause the supply curve for bonds to shift to the left include
A) an expansion in overall economic activity.
B) a decrease in expected inflation.
C) an increase in government deficits.
D) only A and C of the above.

Question

Quizplus · Accepted Answer

A decrease in expected inflation reduces the cost of borrowing, leading to a decrease in the supply of bonds as issuers are less inclined to issue new bonds.

Factors That Can Cause the Supply Curve for Bonds to Shift