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Answer to Question #104403 in Macroeconomics for KG
Question #104403
Which one of the following statements is incorrect?
1 As interest rates increase, bond prices decrease. 2 As interest rates decrease, bond prices increase.
3 There is a positive relationship between interest rate and bond prices. 4 If interest rates are high, the quantity of money demanded will tend to be low.
1 As interest rates increase, bond prices decrease. 2 As interest rates decrease, bond prices increase.
3 There is a positive relationship between interest rate and bond prices. 4 If interest rates are high, the quantity of money demanded will tend to be low.
Expert's answer
Choice number 3 is incorrect. There is inverse relationship between interest rate and bond prices
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