Suppose the Quantity of Bonds Demanded Exceeds the Quantity Supplied

question 36

Multiple Choice

Suppose the quantity of bonds demanded exceeds the quantity supplied at a given interest rate.What will happen to restore equilibrium?

• A) Bond prices will increase and the interest rate will rise.
• B) Bond prices will decrease and the interest rate will fall.
• C) Bond prices will increase and the interest rate will fall.
• D) Bond prices will decrease and the interest rate will rise.
• E) Bond prices will increase and the interest rate will stay the same,as bond prices are independent of the interest rate.

---

Definitions:

Subsidiary

A company that is completely or partly owned and partly or entirely controlled by another company, which is referred to as the parent company.

Upstream

In an industry context, refers to the exploration and production stages in oil and gas, or more generally, to processes or activities that occur at the beginning of a supply chain.

Consolidated Amount

The total sum resulting from the combination of various items, expenses, revenues, or financial statements.

Direct Approach

A method of presentation in cash flow statements where actual cash flow information from operating activities is presented directly.