If Market Interest Rates Increase,the Prices of Existing Bonds Will

question 123

Multiple Choice

If market interest rates increase,the prices of existing bonds will

• A) decrease.
• B) not change.
• C) increase.
• D) decrease if Real GDP decreases and increase if Real GDP increases.

---

Definitions:

Cognitive Dissonance

The mental discomfort experienced by a person who holds two or more contradictory beliefs, ideas, or values.

Displacement

A defense mechanism where negative feelings or impulses are redirected from the original object to a more acceptable or safer target.

Overextension

A linguistic error, common in early language development, where a child applies a word in a broader context than is appropriate.

Functional Fixedness

The tendency to view an object in terms of its name or familiar usage.