In a recession when income and wealth are falling,the demand for bonds ________ and the demand curve shifts to the ________.
A) falls; right
B) falls; left
C) rises; right
D) rises; left

Question

Quizplus · Accepted Answer

In a recession, people have less disposable income and are more risk-averse, leading to a decrease in their demand for bonds. Hence, the demand for bonds falls, and the demand curve shifts to the left.

In a Recession When Income and Wealth Are Falling,the Demand