If the supply of bonds in the United States decreases, bond prices will rise. When bond prices rise interest rates will
A) fall, which will make U.S. financial assets more attractive to foreigners.
B) rise, which will make U.S. financial assets more attractive to foreigners.
C) fall, which will make U.S. financial assets less attractive to foreigners.
D) rise, which will make U.S. financial assets less attractive to foreigners.
Ans: C) fall, which will make U.S. financial assets less attractive to foreigners.
You might also like to view...
A depository institution is a firm that takes deposits from ________ and makes loans to ________
A) households and firms; other households and firms B) firms only; households only C) households only; firms only D) firms only; other firms only
Explain how it is possible for a downward-sloping demand curve to have a constant slope but still have a variation of elasticity of demand along it
What will be an ideal response?