2) If the expected return on U.S. T-Bonds falls from 3 to 2 percent and the expected return on corporate bonds falls from 6 to 2 percent, then the expected return of US Treasury bonds bonds relative to corporate bonds and the demand for US Treasury A) falls; rises B) falls; falls C) rises; rises D) rises; falls
2) If the expected return on U.S. T-Bonds falls from 3 to 2 percent and the expected return on corporate bonds falls from 6 to 2 percent, then the expected return of US Treasury bonds bonds relative to corporate bonds and the demand for US Treasury A) falls; rises B) falls; falls C) rises; rises D) rises; falls
Chapter20: Monetary Policy
Section: Chapter Questions
Problem 3SQP
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I request to you explain it correctly.
![2) If the expected return on U.S. T-Bonds falls from 3 to 2 percent and the expected return on corporate bonds falls from 6 to 2
percent, then the expected return of US Treasury bonds
bonds
relative to corporate bonds and the demand for US Treasury
A) falls; rises
B) falls; falls
C) rises; rises
D) rises; falls](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F51fd2fc1-ca8c-4e7d-bd3a-4e5a44082bf5%2F740bb758-8d47-4f0b-9176-056d37a840c1%2Fpaddvw_processed.jpeg&w=3840&q=75)
Transcribed Image Text:2) If the expected return on U.S. T-Bonds falls from 3 to 2 percent and the expected return on corporate bonds falls from 6 to 2
percent, then the expected return of US Treasury bonds
bonds
relative to corporate bonds and the demand for US Treasury
A) falls; rises
B) falls; falls
C) rises; rises
D) rises; falls
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