In the Figure Above, a Factor That Could Cause the Demand

question 40

Multiple Choice

In the figure above, a factor that could cause the demand for bonds to decrease (shift to the left) is ________.

• A)an increase in the expected return on bonds relative to other assets
• B)a decrease in the expected return on bonds relative to other assets
• C)an increase in wealth
• D)a reduction in the riskiness of bonds relative to other assets

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Definitions:

Morale Problem

A situation in which there is widespread dissatisfaction, lack of enthusiasm, or disengagement among members of a group or organization.

Bounded Rationality

A concept suggesting that decision-makers are limited by the information they have, the cognitive limitations of their minds, and the finite amount of time they have to make decisions.

Maximization

The process of seeking the highest possible outcome or result from a set of choices or actions.

Base Rates

Basic pay rates established for roles or tasks before any additional benefits or allowances are added.