Figure 10.5 -Refer to Figure 10.5..A Shift from MP₁ to MP₂ Will

Multiple Choice

Figure 10.5

-Refer to Figure 10.5..A shift from MP₁ to MP₂ will occur if

A) investors decrease the short-term interest they expect in the future.
B) investors decrease the term premium they require on long-term bonds.
C) the default-risk premium decreases.
D) the expected inflation rate decreases.