Which of the Following Statements Is True If Interest Rates

question 122

Multiple Choice

Which of the following statements is true if interest rates were zero?

• A) The demand for bonds increases because bonds will be a more attractive alternative to money.
• B) People will hold their wealth in the form of money rather than in bonds.
• C) Bonds and money will become perfect substitutes since both are non-interest earning assets.
• D) The supply of bonds will increase.