Based on Our Understanding of the Determinants of the Interest

Multiple Choice

Based on our understanding of the determinants of the interest rate and bond prices,we know that a reduction in income will cause

A) an increase in bond prices and an increase in the interest rate (i) .
B) a reduction in bond prices and an increase in i.
C) an increase in bond prices and a reduction in i.
D) a reduction in bond prices and a reduction in i.
E) none of the above