When the Inflation Rate Is Expected to Increase,the ________ for Bonds

question 92

Multiple Choice

When the inflation rate is expected to increase,the ________ for bonds falls,while the ________ curve shifts to the right,everything else held constant.

• A)demand;demand
• B)demand;supply
• C)supply;demand
• D)supply;supply

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Definitions:

Differential Cost

The amount of increase or decrease in cost expected from a particular course of action compared with an alternative.

Variable Costs

Costs that vary in proportion to changes in the activity base.

Differential Cost

The difference in total cost that will result from selecting one alternative over another in decision-making situations.

Intermediate Product

A product that requires further processing before it is considered a finished good ready for sale to consumers.