Suppose that savers become much more willing to purchase a certain type of munic

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Question

Suppose that savers become much more willing to purchase a certain type of municipal bond. The result will be that the bond's price will

A)

rise relative to the prices of U.S. Treasury securities and corporate bonds.

B)

fall relative to the prices of U.S. Treasury securities and corporate bonds.

C)

fall relative to the price of U.S. Treasury securities but rise relative to the price of corporate bonds.

D)

rise relative to the price of U.S. Treasury securities but fall relative to the price of corporate bonds.

Explanation / Answer

D) rise relative to the price of U.S. Treasury securities but fall relative to the price of corporate bonds.

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Suppose that savers become much more willing to purchase a certain type of munic

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