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Indu Dhiman posted an Question
May 12, 2021 • 22:26 pm
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30 points
30 points
- UGC NET
- Economics
Question: 10/50 unit solved papers (1-10) - economics when the interest rate on a bond is the equilibrium interest rate, in the bond market there is excess and
Question: 10/50 Unit Solved Papers (1-10) - Economics When the interest rate on a bond is the equilibrium interest rate, in the bond market there is excess and the interest rate will below; demand; rise below; demand; fall below; supply; fall below; supply; rise View Solution
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Reshma gupta![best-answer]()
a person is more likely to adopt a bond fund strategy when the interest rate is higher than a equilibrium interest rate. At low interest rates, a person does not sacrifice much income by pursuing the simpler cash strategy. so there would be excess supply but not demand.when the interest rate rises, a bond fund strategy becomes more attractive. That means that the higher the interest rate, the lower the quantity of money demanded.