Suppose That Savers Become Less Willing to Purchase Medium-Quality Corporate

question 95

Multiple Choice

Suppose that savers become less willing to purchase medium-quality corporate bonds. The result will be that the prices of medium-quality corporate bonds will

• A)fall relative to the price of U.S. Treasury securities, but rise relative to the price of high-quality corporate bonds.
• B)rise relative to the price of U.S. Treasury securities, but fall relative to the price of high-quality corporate bonds.
• C)rise relative to the prices of U.S. Treasury securities and high-quality corporate bonds.
• D)fall relative to the prices of U.S. Treasury securities and high-quality corporate bonds.

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Definitions:

Privately Owned Resources

Refers to assets or property owned by individuals or corporations rather than by the government or the public.

Bad Apple Effect

The tendency for one person's negative behavior to corrupt a group's dynamics or moral.

Social Loafer

An individual who contributes less effort to a collaborative task when part of a group than when working alone.

Group Decision Making

The process by which multiple individuals come together to analyze problems, consider options, and agree upon a course of action.