Question

Everything else held constant, when bonds become less widely traded, and as a consequence the bond market becomes less liquid, the demand curve for bonds shifts to the ________ and the interest rate ________.

Answer 1

The demand curve for bonds shifts to the left and the interest rate rises.

• left; rises

Influence of the demand curve

When bonds are not frequently traded, and the market becomes less liquid, the demand for the bonds falls.

As a result, with a fall in demand, the curve will move towards the left. To overcome the less liquid position, bond suppliers will raise the interest rate to attract investors and capital in the market

To overcome the less liquid position, bond suppliers will raise the interest rate to attract investors and capital in the market

Therefore, the correct answers are left and rise.

Learn more about demand curve from here: brainly.com/question/1486483