Recall the Application about the possible link between interest rates and commodity prices worldwide to answer the following question(s).According to this Application, which is a theoretical explanation for why commodity prices rise with expansionary monetary policy?
A. Lower interest rates raise bond prices, so investors invest less in bonds and more in commodities.
B. Higher interest rates raise bond prices, so investors invest less in bonds and more in commodities.
C. Lower interest rates raise bond prices, so investors invest more in bonds and more in commodities.
D. Lower interest rates lower bond prices, so investors invest less in bonds and more in commodities.
Answer: A
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The demand curve is also the
A) total cost curve. B) total benefit curve. C) marginal cost curve. D) marginal benefit curve. E) marginal deadweight cost curve.
Governments try to smooth business cycles by using these policies, except:
A. Tax policies B. Interest rate policies C. Wage rate policies D. Government-spending policies