If People Expect Nominal Interest Rates to Be Lower in the Future

question 73

Multiple Choice

If people expect nominal interest rates to be lower in the future, the expected return on bonds ________, and the demand for money ________.

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

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Definitions:

Idealistic Approach

An approach that emphasizes high standards and principles, often with a focus on what is perfect or desirable over what is realistic.

Formal Operational

The stage of cognitive development in Piaget's theory, typically beginning around age 12, where individuals gain the ability for abstract thinking.

Alternatives

Different options or choices available in a given situation or problem-solving context.

Laptop

A portable personal computer with a screen and keyboard integrated into a single unit that can be easily moved and used in various locations.