Multiple Choice
Suppose the quantity of bonds demanded exceeds the quantity supplied at a given interest rate.What will happen to restore equilibrium?
A) Bond prices will increase and the interest rate will rise.
B) Bond prices will decrease and the interest rate will fall.
C) Bond prices will increase and the interest rate will fall.
D) Bond prices will decrease and the interest rate will rise.
E) Bond prices will increase and the interest rate will stay the same,as bond prices are independent of the interest rate.
Correct Answer:
Verified
Correct Answer:
Verified
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