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Everything else held​ constant, when stock prices become less​ volatile, the demand curve for bonds shifts to the​ ________ and the interest rate​ ________.

1 Answer

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Answer:

A). Left; Rises.

Step-by-step explanation:

As per the given description, if the stock prices remain less elusive the demand curve for bonds shifts to 'left' while the interest rates 'rises' as in such a case, demand contracts or decreases due to several other factors except price of the good. This would lead to a steep rise in the 'interest rates' for possessing other assets as contraction or left shift in demand reflects the situation of recession where there is a considerable fall in income and consequently, the expenditure. Therefore, the people would require money to spend. Hence, option A is the correct answer.

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