An Increase in Expected Inflation Causes the Supply of Bonds

question 26

Multiple Choice

An increase in expected inflation causes the supply of bonds to ________ and the supply curve to shift to the ________.

• A) increase; left
• B) increase; right
• C) decrease; left
• D) decrease; right

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Definitions:

Savings Account

A bank account that earns interest and is typically used for holding money that is not intended for daily expenses.

Accumulated Amount

The total sum including the principal and the compounded interest over a period.

End-Of-Quarter Payments

Payments that are made at the conclusion of a fiscal quarter, often related to financial obligations such as loans or leases.

Annuity

A fiscal product designed to disburse a static sequence of payments to someone, chiefly utilized as a means for generating income during retirement.