As the economy weakens, one would expect investment in ______ funds to increase and investment in ______ funds to decrease. 

The correct answer is money market mutual : equity 

Key Points

• Various Financial instruments:
  • Money market:
    • A money market fund is a type of mutual fund that has relatively low risks compared to other mutual funds and most other investments and historically has had lower returns.
    • Money market funds invest in high quality, short-term debt securities and pay dividends that generally reflect short-term interest rates.
  • Equity 
    • It represents the value that would be returned to a company's shareholders if all of the assets were liquidated and all of the company's debts were paid off.
    • We can also think of equity as a degree of residual ownership in a firm or asset after subtracting all debts associated with that asset.
  • Municipal bonds (munis)
    • These are debt securities issued by state and local governments.
    • These can be thought of as loans that investors make to local governments, and are used to fund public works such as parks, libraries, bridges and roads, and other infrastructure.
  • Bonds:

    • A bond is a loan that the bond purchaser, or bondholder, makes to the bond issuer. Governments, corporations and municipalities issue bonds when they need capital.
    • An investor who buys a government bond is lending the government money. If an investor buys a corporate bond, the investor is lending the corporation money.