Lower expected interest rates in the future ________ the demand for long-term bonds and shift the demand curve to the ________
A) increase; left.
B) increase; right.
C) decrease; left.
D) decrease; right.

Question

Quizplus · Accepted Answer

Lower expected interest rates in the future increase the demand for long-term bonds because they will be more valuable compared to new bonds issued at the lower rates. This increased demand shifts the demand curve to the right.

Lower Expected Interest Rates in the Future ________ the Demand