When interest rates decrease, the price of _____ tends to increase due to their inverse relationship.

When interest rates decrease, the price of bonds tends to increase because of their inverse relationship. This means that when borrowing money becomes cheaper, more people want to invest in bonds, which drives up their prices. For example, if a bond pays a fixed interest rate and new bonds are issued at a lower rate, the existing bond becomes more valuable since it offers a higher return. As more investors buy these older bonds, their prices go up. Therefore, lower interest rates lead to higher bond prices as demand increases.