What Effect Will a Lower Price of Bonds Have on Interest

question 73

Multiple Choice

What effect will a lower price of bonds have on interest rates?

• A)It will raise interest rates.
• B)It will lower interest rates.
• C)It could either raise or lower interest rates.
• D)There is no connection between the price of bonds and interest rates.

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Definitions:

Economy Can Produce

The maximum quantity of goods and services an economy can generate when it utilizes all its resources efficiently.

Combinations Of Output

Various possible quantities of different goods that can be produced or provided given certain resources and technology.

Comparative Advantage

The ability of an entity to produce a good or service at a lower opportunity cost than another.

Opportunity Cost

The worth of the best alternative that is given up to make a decision.