Question

During a recession, the supply of bonds ________ and the supply curve shifts to the ________, everything else held constant.

Answer 1

During a recession, the supply of bonds decreases and the supply curve shifts to the left, everything else held constant.

The correct option is C.

What is Recession?

When economic activity declines broadly, there is a recession, which is a contraction of the business cycle. The majority of the time, recessions happen when consumer spending declines dramatically.

Real GDP, real income, employment, industrial production, and wholesale-retail sales are typical indicators of a recession, which is defined as a major fall in economic activity that affects the entire economy and lasts for more than a few months.

What is supply curve?

Supply refers to the volume of a resource that businesses, producers, workers, providers of financial assets, or other economic agents are willing and able to offer to the market or to a single consumer. The supply can be in the form of labor hours, finished commodities, raw materials, or any other limited-supply or priceless resource.

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I understand that the question you are looking for is:

During a recession, the supply of bonds ________ and the supply curve shifts to the ________, everything else held constant.

A) increases; left

B) increases; right

C) decreases; left

D) decreases; right