How is the price of a financial asset, such as government bonds, related to the interest rate?
What will be an ideal response?
The price of financial assets, such as government bonds, is negatively related to the interest rate. If the interest rate rises, the price of government bonds falls and if the interest rate falls, the price of government bonds rises.
Economics
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Economics
Which of the following is NOT true for a perfectly competitive firm?
A. P = MR B. P = AR C. MR = TR D. AR = MR
Economics