The price of government bonds and the interest rate received by a bond buyer are

Question

Quizplus · Accepted Answer

Government bonds and their interest rates are inversely related, meaning that as the price of government bonds increases, the interest rate received by bond buyers decreases. This relationship is based on the supply and demand of bonds in the market. When demand for bonds is high, their prices increase and the interest rates decrease, and vice versa. The Federal Reserve's open-market operations can affect the supply and demand of bonds, but they do not make them independent of each other.

The Price of Government Bonds and the Interest Rate Received