When people expect interest rates to fall in the future, the _____ curve for bonds shifts...
When people expect interest rates to fall in the future, the _____ curve for bonds shifts to the _____.
A. supply; right.
B. demand; left.
C. supply; left.
D. demand; right.
Homework Answers
Answer
Option D
Demand; right
The fall in the interest rate increases the price of bonds so if the interest rate is going to decrease then people increase the demand for the bonds and shifts the demand curve to the right.
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