When bonds become less widely traded,and as a consequence the market becomes less liquid,the demand curve for bonds shifts to the ________ and the interest rate ________.
A) right; rises
B) right; falls
C) left; falls
D) left; rises

Question

Quizplus · Accepted Answer

When bonds become less widely traded and the market becomes less liquid, the demand for them decreases, shifting the demand curve to the left. This decrease in demand leads to an increase in the interest rate, as sellers must offer higher returns to attract buyers.

When Bonds Become Less Widely Traded,and as a Consequence the Market