Question $4$

Suppose the U$.$S$.$ Treasury announces plans to issue $$50$ billion of new bonds. Assuning the emomemet wav

expected, what effect, other things held constant, would that have on bond prices and interst cate:

There would be no changes in either prices or interest rates.

Prices would decline and interest rates would rise.

Prices and interest rates would both decline.

Prices and interest rates would both rise.

Prices would rise and interest rates would decline.