What effect will a lower price of bonds have on interest rates?

Question

Quizplus · Accepted Answer

When the price of bonds decreases, the yield or return on those bonds increases. This means that investors can earn a higher return by investing in bonds, which makes them more attractive than other investment options such as stocks. As demand for bonds increases, the price of bonds begins to rise again. However, in the short term, the decrease in the price of bonds generally leads to an increase in interest rates.

What Effect Will a Lower Price of Bonds Have on Interest