The Interest Rate Falls When Either the Demand for Bonds

question 20

Multiple Choice

The interest rate falls when either the demand for bonds ________ or the supply of bonds ________.

• A)increases;increases
• B)increases;decreases
• C)decreases;decreases
• D)decreases;increases

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Definitions:

Producer Surplus

The difference between the amount that producers receive from the sale of a good or service and the minimum amount they would accept.

Equilibrium Price

The equilibrium price is the market price at which the quantity of goods supplied is equal to the quantity of goods demanded, leading to market balance.

Equilibrium Quantity

The amount of goods or services supplied that is equal to the amount demanded at the market equilibrium price.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, leading to market equilibrium.