The Demand Curve for Bonds Would Be Reduced by

question 82

Multiple Choice

The demand curve for bonds would be reduced by

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

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Definitions:

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.

Availability Heuristic

Availability Heuristic is a mental shortcut that relies on immediate examples that come to a person’s mind when evaluating a specific topic, concept, method, or decision.

Divergent Thinking

A thought process or method used to generate creative ideas by exploring many possible solutions.

Functional Thinking

A cognitive approach focusing on the practical and utilitarian aspects of problem-solving and decision-making.