Assume that world economic news indicate that inflation will belower over the next year than previously expected. In this case,bond demand and/or supply will react as in graph: Question 3 options:
(a) - Bond demand will increase, with no effect on the supplycurve
(b) - Bond demand will decrease, with no effect on the supplycurve
(c) - Bond demand will decrease while bond supply increases
(d) - Bond demand will increase while bond supply decreases
Assume That World Economic News Indicate That Inflation Will Be Lower Over The Next Year Than Previously Expected In Th 1 (516.54 KiB) Viewed 13 times
(a) (c) P2 P1 P1 P P2 P D1 D1 D2 D2 Q1 Q2 Q1 Q2 S Q S1 S2 Q P P1 P2 P P2 P1 D1 D2 Q2 Q1 $2 D1 Q2 Q1 Q S1 D2 Q (b) (d)
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