When Expected Inflation Increases,investors ________ Their Demand for Bonds Because,for

question 92

Multiple Choice

When expected inflation increases,investors ________ their demand for bonds because,for each nominal interest rate,the higher the inflation rate,the ________ the real interest rate investors will receive.

• A) increase; higher
• B) increase; lower
• C) reduce; higher
• D) reduce; lower

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Definitions:

Life Policy

An agreement that awards a specified sum to a named beneficiary when the person covered by the policy dies.

Maximum Available

The highest amount or quantity that can be used, offered, or allocated from a particular resource or within a specific framework.

Straight-life Policy

A type of life insurance policy that provides coverage for the insured's entire lifetime, with fixed annual premiums and a guaranteed death benefit.

Loan Value

The amount that an insured may borrow on a policy from the insurance company.