Homework Answers
Question 8
(a)
In the bond markets, businesses acts as the supplier of bonds as they tends to issue bonds to raise resources for their business operations.
It has been provided that businesses begin to borrow more funds to expand production.
As businesses will borrow more they will issue more bonds and thus the supply of bonds will increase.
This will shift the supply curve of bonds to the right.
Following is the required graph -
As the above graph shows that the rightward shift of the supply curve of bonds results in a decrease in price of bonds.
Thus,
The bond prices will decrease.
The price of bond and interest rate has inverse relationship. This means as bonds prices rise, interest rate will fall and vice-versa.
Thus,
The interest rate will increase.
(b)
In bond market, investors acts as buyers of bond as they tend to demand bonds for investment purpose.
It has been stated that because of political instability abroad, a large number of foreign citizens are moving funds into the United States to buy US bonds.
This purchase of US bonds by foreigners will increase the demand for US bonds.
This will shift the demand curve for bonds to the right.
Following is the required graph -
As the above graph shows that the rightward shift of the demand curve of bonds results in an increase in price of bonds.
Thus,
The bond prices will increase.
The price of bond and interest rate has inverse relationship. This means as bonds prices rise, interest rate will fall and vice-versa.
Thus,
The interest rate will decrease.
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8. Suppose that the bond market can be depicted by the graphs below. For each of...
7. Suppose that the demand and supply of money in the U.S. can be depicted by...
7. Suppose that the demand and supply of money in the U.S. can be depicted by each of the graphs below. For each situation, assume that the overall price level in the economy cannot change (i.e. it is a "short-run" analysis). (30 total points) a) Show how the money market would be affected in the graph if the Federal Reserve Board in the U.S. decides to sell bonds to the private bond market. . Describe what would happen (if anything)...
20. In the bond market, the bond demanders are the and the bond suppliers are the...
20. In the bond market, the bond demanders are the and the bond suppliers are the A) lenders: borrowers B) lenders, advancers C) borrowers; lenders D) borrowers, advancers 21. The demand curve for bonds has the usual downward slope, indicating that at prices of the bond, everything else equal, the is higher. A) higher; demand B) higher, quantity demanded C) lower; demand D) lower; quantity demanded 22. Everything else held constant, if interest rates are expected to fall in the...
Suppose the market for coffee is in equilibrium. Explain (using graphs) what would happen to the...
Suppose the market for coffee is in equilibrium. Explain (using graphs) what would happen to the equilibrium price and equilibrium quantity of coffee in each of the following scenarios. Please place your final equilibrium effects on price and quantity in the SNoodle box below (ie. just say 'Equilibrium price increase/decreased etc and equilibrium quantity increased/decreased etc."). Be sure to put your graphical analysis on your scratch paper to be turned in. Credit will be given not only for the correct...
Please help me answer all greatly appreciated. Thumbs up a rise in demand for loanable funds...
Please help me answer all greatly appreciated. Thumbs up
a rise in demand for loanable funds by a large country can result fall in interest rates Ono change in interest rates O an increase in the interest rate Onone of the answers are correct if wealth increases the loanable funds supply curve shifts to the right true false If you expect prices to continue to fall since they have been falling in the past three months, your are exhibiting adaptive...
3) (10 points total) You have the following expressions for bond demand and bond supply respectively:...
3) (10 points total) You have the following expressions for bond demand and bond supply respectively: BD: P 200-3Q B: P 50 +2Q a) (2 points) Solve for the equilibrium quantity and price in this bond market (please show work) b) (4 points for correct and completely labeled diagram) Draw a demand and supply diagram and locate this initial point as point A. Now conditions change.... bond demand remains the same but bond supply changes and is now: BS: P-...
9. Equilibrium in the bond market The following graph shows a bond market in equilibrium at...
9. Equilibrium in the bond market
The following graph shows a bond market in equilibrium at a bond
price of $5.
Use the following graph input tool to answer the questions that
follow. (Note: You will not be graded on any adjustments you make
to the graph.)
Suppose the bond price has
changed to $2, creating a ____________( surplus / shortage
) of ______________
million bonds. (Hint: Enter the new price in the “Current Price”
field to see the changes...
7. Understanding the Fisher effect Aa Aa The following graphs show the loanable funds market. The...
7. Understanding the Fisher effect Aa Aa The following graphs show the loanable funds market. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. For each of the following scenarios, use the graph to show how the market will react to the given change in the expected future inflation rate. The following graph shows the demand and supply curves for loanable funds when the expected future inflation rate...
(16) When interest rates in the U.S. increase, the supply of dollars ________ and the demand...
(16)
When interest rates in the U.S. increase, the supply of dollars
________ and the demand for dollars ________.
decreases; increases
increases; decreases
increases; increases
decreases; decreases
(17)
The World Trade Organization
was established as part of the
Bretton Woods agreement.
requires members to charge the
same prices on goods traded internationally.
requires members to reduce
tariffs and eliminate non-tariff barriers.
is made up of business leaders
from all over the world.
(18)
If...
** You will need to draw graphs for this homework. You can do them on the...
** You will need to draw graphs for this homework. You can do them on the computer with a drawing program if you wish. You may also simply draw them out by hand, properly labeled, and then take a picture and upload the file. If you have trouble ask for help. ** Explain the difference between a change in Demand and a change in the Quantity demanded. Graph and explain the impact on the market demand for electric...
Consider the market for wheat, depicted in the figure to the right Suppose a price floor...
Consider the market for wheat, depicted in the figure to the right Suppose a price floor of government is imposed by the As a result of the price floor there is a of wheat Compared with the market clearing equilibrium, is the price floor efficient? What are represents the loss in efficiency in terms of consumer and producer surplus resulting from the price floor? Use the triangle drawing tool to shade in deadweight loss Label this shaded area Deadweight Loss...
7. Suppose that the demand and supply of money in the U.S. can be depicted by each of the graphs below. For each situation, assume that the overall price level in the economy cannot change (i.e. it is a "short-run" analysis). (30 total points) a) Show how the money market would be affected in the graph if the Federal Reserve Board in the U.S. decides to sell bonds to the private bond market. . Describe what would happen (if anything)...
20. In the bond market, the bond demanders are the and the bond suppliers are the A) lenders: borrowers B) lenders, advancers C) borrowers; lenders D) borrowers, advancers 21. The demand curve for bonds has the usual downward slope, indicating that at prices of the bond, everything else equal, the is higher. A) higher; demand B) higher, quantity demanded C) lower; demand D) lower; quantity demanded 22. Everything else held constant, if interest rates are expected to fall in the...
Suppose the market for coffee is in equilibrium. Explain (using graphs) what would happen to the equilibrium price and equilibrium quantity of coffee in each of the following scenarios. Please place your final equilibrium effects on price and quantity in the SNoodle box below (ie. just say 'Equilibrium price increase/decreased etc and equilibrium quantity increased/decreased etc."). Be sure to put your graphical analysis on your scratch paper to be turned in. Credit will be given not only for the correct...
Please help me answer all greatly appreciated. Thumbs up
a rise in demand for loanable funds by a large country can result fall in interest rates Ono change in interest rates O an increase in the interest rate Onone of the answers are correct if wealth increases the loanable funds supply curve shifts to the right true false If you expect prices to continue to fall since they have been falling in the past three months, your are exhibiting adaptive...
3) (10 points total) You have the following expressions for bond demand and bond supply respectively: BD: P 200-3Q B: P 50 +2Q a) (2 points) Solve for the equilibrium quantity and price in this bond market (please show work) b) (4 points for correct and completely labeled diagram) Draw a demand and supply diagram and locate this initial point as point A. Now conditions change.... bond demand remains the same but bond supply changes and is now: BS: P-...
9. Equilibrium in the bond market
The following graph shows a bond market in equilibrium at a bond
price of $5.
Use the following graph input tool to answer the questions that
follow. (Note: You will not be graded on any adjustments you make
to the graph.)
Suppose the bond price has
changed to $2, creating a ____________( surplus / shortage
) of ______________
million bonds. (Hint: Enter the new price in the “Current Price”
field to see the changes...
7. Understanding the Fisher effect Aa Aa The following graphs show the loanable funds market. The upward-sloping orange line represents the supply of loanable funds, and the downward-sloping blue line represents the demand for loanable funds. For each of the following scenarios, use the graph to show how the market will react to the given change in the expected future inflation rate. The following graph shows the demand and supply curves for loanable funds when the expected future inflation rate...
(16)
When interest rates in the U.S. increase, the supply of dollars
________ and the demand for dollars ________.
decreases; increases
increases; decreases
increases; increases
decreases; decreases
(17)
The World Trade Organization
was established as part of the
Bretton Woods agreement.
requires members to charge the
same prices on goods traded internationally.
requires members to reduce
tariffs and eliminate non-tariff barriers.
is made up of business leaders
from all over the world.
(18)
If...
Consider the market for wheat, depicted in the figure to the right Suppose a price floor of government is imposed by the As a result of the price floor there is a of wheat Compared with the market clearing equilibrium, is the price floor efficient? What are represents the loss in efficiency in terms of consumer and producer surplus resulting from the price floor? Use the triangle drawing tool to shade in deadweight loss Label this shaded area Deadweight Loss...
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