When Interest Rates in the Bond Market Go Up

question 290

Multiple Choice

When interest rates in the bond market go up

• A) there is no impact on the price of existing bonds.
• B) the price of existing bonds goes up.
• C) the price of stocks goes up.
• D) the price of existing bonds goes down.

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Definitions:

International Specialization

The economic strategy where countries focus on the production and export of goods and services for which they have a comparative advantage.

Trading Possibilities Line

A line that shows the different combinations of two products that an economy is able to obtain (consume) when it specializes in the production of one product and trades (exports) it to obtain the other product.

Cost Ratios

These ratios compare different types of costs to each other or to sales in order to evaluate a company's financial efficiency and profitability.

Constant Costs

Costs that do not change in total with the level of activity or production volume, within a certain range of activity or period of time.