The Figure Given Below Shows the Demand [D and D']

The figure given below shows the demand [D and D'] and supply [S and S'] curves of shares of stock.Figure 17.2

-If bonds and stocks are considered to be substitute goods, and the investors expect stock prices to drop in the near future, _____.

A) the price of bonds will also decline
B) the supply of bonds will increase
C) the interest rate on bonds will decline
D) the demand for stocks will increase
E) the demand for bonds will decline

Correct Answer:

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