A government budget deficit will lead to an ______ in the ______ for/of bonds. This will lead to a(n) ________ in interest rates.

Question 5 options:

increase, supply, increase

decrease, supply, decrease

increase, demand, increase

decrease, demand, decrease

Question 6(1 point)

Saved

You analyze the bond market. One day you observe that bond prices go down while bond market yield increases. The reason could be that:

Question 6 options:

New inflation data came out, showing an increase in the monthly inflation rate. This makes people adjust up their expectations for future inflation.

The Fed made a statement indicating that they will probably not increase interest rates later this year as they had indicated previously.

People started getting nervous that stock market prices will fall.

Bond prices went down, so the public wanted to buy more bonds.