A Permanent Increase of Borrowing by the U

Multiple Choice

A permanent increase of borrowing by the U.S. Treasury to finance growing budget deficits will:

A) result in U.S. Treasury yields being higher than high-grade corporate bonds.
B) result in the price of U.S. Treasury bonds rising.
C) cause the yield on U.S. Treasury bonds to increase, but still be lower than corporate bonds.
D) result in lower yields on corporate bonds.