An increase in the nation's wealth, all other factors constant, would cause:

Question

Quizplus · Accepted Answer

An increase in the nation's wealth typically results in a decrease in bond yields and an increase in bond prices. This is because investors have more money and are willing to pay more for bonds, driving prices up and pushing yields down. Therefore, choice C, which states that bond prices will rise and yields will decrease, is the correct answer.

An Increase in the Nation's Wealth, All Other Factors Constant