How might a sudden increase in people's expectations of future real estate prices affect interest rates? A. Interest rates would decrease because real estate would have a relatively lower rate of return compared to bonds, which would cause the demand for bonds to increase. B. Interest rates would decrease because real estate would have a relatively higher rate of return compared to bonds, which would cause the demand for bonds to decrease. C. Interest rates would increase because real estate would have a relatively lower rate of return compared to bonds, which would cause the demand for bonds to increase. D. Interest rates would increase because real estate would have a relatively higher rate of return compared to bonds, which would cause the demand for bonds to decrease.

A. Interest rates would decrease because real estate would have a relatively lower rate of return compared to bonds, which would cause the demand for bonds to increase.

Explanation:

Interest rates would decrease because companies would realize customers aren't buying anymore. Due to low business and little profit, they would be forced to cut prices. There would be a sharp rate of returns rather than bonds. This would cause the rate of bonds to decrease. So, the answer is A.