question archive If government revenues increase significantly, what will likely happen to bond prices? Why?  

If government revenues increase significantly, what will likely happen to bond prices? Why?  

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If government revenues increase significantly, what will likely happen to bond prices? Why?

 

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 Bond prices will increase/ rise

Step-by-step explanation

Government revenue increases as a result of implementing tax at higher rate it which automatically leads to an increase in the price of bond. This is going to increase the demands as well. Those who wants to sell off the bonds during the peak rates they would incur profits from the same.