An increase in the riskiness of corporate bonds will ________ the price of corporate bonds and ________ the price of Treasury bonds, everything else held constant

A) increase; increase
B) reduce; reduce
C) reduce; increase
D) increase; reduce

C

Economics

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In a free-market economy, the pricing mechanism always operates to

a. produce an equitable distribution of income. b. provide an efficient allocation of resources. c. correct any inequality in distribution of output. d. equate consumers' desires with ability to pay.

Economics

Suppose that a business incurred implicit costs of $200,000 and explicit costs of $1 million in a specific year. If the firm sold 4,000 units of its output at $300 per unit, its accounting profits were:

A. $100,000 and its economic profits were zero. B. $200,000 and its economic profits were zero. C. $100,000 and its economic profits were $100,000. D. zero and its economic loss was $200,000.

Economics