Everything else held constant,when real estate prices are expected to decrease
A)the demand curve for bonds shifts to the left and the interest rate rises.
B)the demand curve for bonds shifts to the left and the interest rate falls.
C)the demand curve for bonds shifts to the right and the interest rate falls.
D)the supply curve for bonds shifts to the right and the interest rate falls.

Question

Quizplus · Accepted Answer

When real estate prices are expected to decrease, investors may shift their investments from real estate to bonds, increasing the demand for bonds. This shift in demand to the right typically results in a lower interest rate, as the price of bonds increases (inverse relationship between bond prices and interest rates).

Everything Else Held Constant,when Real Estate Prices Are Expected to Decrease