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Everything Else Held Constant,if the Federal Government Were to Guarantee

Question 46

Multiple Choice

Everything else held constant,if the federal government were to guarantee today that it will pay creditors if a corporation goes bankrupt in the future,the interest rate on corporate bonds will ________ and the interest rate on Treasury securities will ________.


A) increase;increase
B) increase;decrease
C) decrease;increase
D) decrease;decrease

Correct Answer:

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