Which of the following will lead to a decrease in the price of existing bonds?

Question

Quizplus · Accepted Answer

When the money supply is reduced, interest rates typically increase to balance the supply and demand for money. Higher interest rates make new bonds more attractive because they pay more interest compared to existing bonds, which were issued at lower interest rates. As a result, the price of existing bonds falls as investors prefer the new bonds with higher interest rates.

Which of the Following Will Lead to a Decrease in the Price