The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2

-The U.S. government bonds are likely to be less risky because:

Question

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2
 
-The U.S. government bonds are likely to be less risky because:

Quizplus · Accepted Answer

The government can raise taxes to redeem the bonds at maturity, which ensures that they have the ability to repay the bonds. As a result, government bonds are considered less risky compared to other stocks or investments. A balanced budget, gold backing, limited liability, and excess reserve of foreign exchange do not necessarily guarantee that the government can repay its debts.

The Figure Given Below Shows the Demand [D and D']