The Demand Curve for Bonds Would Be Shifted to the Left

question 44

Multiple Choice

The demand curve for bonds would be shifted to the left by

• A)an increase in expected returns on other assets.
• B)a decrease in the information costs of bonds relative to other assets.
• C)a decrease in expected inflation.
• D)an increase in the liquidity of bonds relative to other assets.

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Definitions:

Operating Lease

A contract that allows for the use of an asset but does not convey rights of ownership of the asset.

Owns the Asset

Refers to having legal title or right to possession of an asset, implying control over its use and the benefits it produces.

Lessee

The party in a lease agreement who pays the lessor for the use of an asset.

Lessor

The party in a lease agreement who owns the leased asset and grants the lessee the right to use that asset in exchange for periodic lease payments.