Question

Question 9 (1 point) If the actual interest rate is below the equilibrium interest rate, the Federal Reserve must intervene in financial markets to restore the interest rate to its equilibrium value O price of bonds will increase O price of bonds will decrease money supply will increase until the interest rate rises money supply will decrease until the interest rate rises Question 10 (1 point) In the short-run macro model, a decrease in the money supply will O result in a leftward movement along the AE line O result in a rightward movement along the AE line result in a upward shift of the AE line O result in a downward shift of the AE line. not impact the AE line W Question 11 (1 point) If the Fed decreases the money supply, we should expect the interest rate d to fall, spending on automobiles and business investment spending to rise, and the price of bonds to increase to rise, spending on automobiles and business investment spending to fall, and the price of bonds to decrease to rise, spending on automobiles and business investment spending to fall, and the price of bonds to increase to fall. spending on automobiles and business investment spending to fall, and the price of bonds to decrease to rise, spending on automobiles to fall, business investment to rise, and the price of bonds to decrease

Answer 1

Q9) option B)

Bond prices will rise

10) option E)

AE doesn't shift , due to changes in Ms

11) option B)

as Money supply fall , so interest rate will rise, hence spending falls, & as bond prices & interest rate are inversely related,

So bond prices will fall