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Suppose that the return on assets other than bonds falls. In the bond market, this will result in a? 

          Suppose that the return on assets other than bonds falls. In the bond market, this will result in a?

Added by F-Tima O.

Principles of Economics
Principles of Economics
Gregory Mankiw 8th Edition
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Suppose that the return on assets other than bonds falls. In the bond market, this will result in a?
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Transcript

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00:01 So here we're talking bond markets.
00:02 And the first thing you should do when you're confronted with a market problem is just draw a market.
00:06 A market here is a story about quantity and price.
00:10 We have a demand curve for bonds, d0.
00:12 We have a supply curve for bonds, s0.
00:15 Now we have a new story, right? the expected return is followed.
00:22 How are we going to map that into the model? well, my argument is that people want fewer bonds.
00:30 If the expected return is falling, people are going to want fewer bonds.
00:38 So this would mean fewer buyers, and it would also mean more sellers...
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