When the Fed makes bonds more or less attractive,it influences the:
A) Open market decision.
B) Money multiplier.
C) Portfolio decision.
D) Reserve decision.

Question

Quizplus · Accepted Answer

When the Fed makes bonds more or less attractive, it affects the portfolio decision of investors. If the Fed makes bonds more attractive by raising interest rates, investors may be more inclined to buy bonds instead of other investments. This can affect the demand for other assets such as stocks, which may decrease in value if investors sell them to buy bonds. On the other hand, if the Fed makes bonds less attractive by lowering interest rates, investors may be more inclined to buy other assets instead of bonds. This can lead to increased demand for assets such as stocks, which may increase in value. Therefore, the Fed's actions can have a significant impact on the portfolio decisions of investors.

When the Fed Makes Bonds More or Less Attractive,it Influences