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Consider market for bonds. If an announcement by the Bank of Canada creates widespread expectation of lower interest rates in the future, then right now: Select one: OA. the equilibrium interest rate will go up and bond prices will go down. O B. the equilibrium interest rate will go down and bond prices will go down. OC. the equilibrium interest rate will go up and bond prices will go up. D. the equilibrium interest rate will go down and bond prices will go up.

Consider market for bonds. If an announcement by the Bank of Canada creates widespread expectation of lower interest rates in the future, then right now: Select one: OA. the equilibrium interest rate will go up and bond prices will go down. O B. the equilibrium interest rate will go down and bond prices will go down. OC. the equilibrium interest rate will go up and bond prices will go up. D. the equilibrium interest rate will go down and bond prices will go up.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Consider market for bonds. If an announcement by the Bank of Canada creates widespread expectation of lower interest rates in the future, then right now: Select one: O A. the equilibrium interest rate will go up and bond prices will go down. O B. the equilibrium interest rate will go down and bond prices will go down. the equilibrium interest rate will go up and bond prices will go up. D. the equilibrium interest rate will go down and bond prices will go up.
Transcribed Image Text:Consider market for bonds. If an announcement by the Bank of Canada creates widespread expectation of lower interest rates in the future, then right now: Select one: O A. the equilibrium interest rate will go up and bond prices will go down. O B. the equilibrium interest rate will go down and bond prices will go down. the equilibrium interest rate will go up and bond prices will go up. D. the equilibrium interest rate will go down and bond prices will go up.
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