If Interest Rates Are Falling,then,ceteris Paribus

question 47

Multiple Choice

If interest rates are falling,then,ceteris paribus,

• A)bond holders are suffering capital losses.
• B)bond prices are rising.
• C)the liquidity demand for money will be falling.
• D)income must be rising.

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Definitions:

Third Payment

This refers to the third installment of a series of payments toward a financial obligation.

Loan

Borrowed capital which is due to be paid back with interest.

Payments

Transactions made to fulfill obligations, such as bills, loans, or purchases.

Balance

The amount of money held in a financial account, calculated as the funds deposited minus any withdrawals or expenditures.