Question
Two events happen simultaneously in the bond market. ( i ) US investors expect the US stock market to perform very well and ( ii
Two events happen simultaneously in the bond market. i US investors expect the US stock market to perform very well and ii borrowers and only borrowers expect inflation rates to rise in the future. What will happen in the bond market.
Question options:
a The price for bonds will increase; the quantity of bonds exchanged will increase
b The price for bonds will increase; the quantity of bonds exchanged will decrease
c The price for bonds will increase; it is impossible to determine what will happen to quantity
d The price for bonds will decrease; the quantity of bonds exchanged will increase
e The price for bonds will decrease; the quantity of bonds exchanged will decrease
f The price for bonds will decrease; it is impossible to determine what will happen to quantity
g The price for bonds cannot be determined; the quantity of bonds exchanged will increase
h The price for bonds cannot be determined; the quantity of bonds exchanged will decrease
i The price for bonds cannot be determined; it is impossible to determine what will happen to quantity
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