ZuoTi.Pro
Question

A.) Suppose that investors in the bonds market find that risk levels decrease. Consequently, the demand...

A.) Suppose that investors in the bonds market find that risk levels decrease. Consequently, the demand for bonds should _____ and the demand curve will shift to the ____.

A. decrease; right

B. decrease; left

C. increase; right

D. increase; left

B.) Suppose that government deficit spending rises. In this case, we would expected that the equilibrium price will ____ and the equilibrium yield will ____.

A. rise; fall

B. rise; rise

C. fall; rise

D. fall; fall

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer : 1) The answer is option C.

In bond market when risk level decrease then people buy more bonds which increase the demand for bonds. When demand increase then the demand curve shift to rightward. Therefore, option C is correct.

2) The answer is option C.

When government deficit spending increase then in near future the tax rate will increase or the government spending will decrease. As a result, in near future the aggregate demand will decrease which will decrease the price level. When price level fall then the equilibrium yield increase. Because there exists an inverse relationship between price and yield. Therefore, option C is correct.

0 0
Add a comment
Know the answer?
Add Answer to:
A.) Suppose that investors in the bonds market find that risk levels decrease. Consequently, the demand...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Suppose there is a increase in the wealth levels in the economy. Consequently, in the market...

    Suppose there is a increase in the wealth levels in the economy. Consequently, in the market for bonds, we would expect that the _____ for bonds will _____ . supply; decrease supply; increase demand; increase demand; decrease

  • It is not necessary to write detail answer, some question is easy to find answer, you...

    It is not necessary to write detail answer, some question is easy to find answer, you dont need to explain in detail, thank you :) 7. Everything else held constant, if aggregate output is to the right of the LM curve, then there is an excess of money which will cause the interest rate to A) supply; fall- B) supply; rise- C) demand; fall- D) demand; rise- t 8. If the economy is on the LM curve, but is to...

  • 9. A shift to the right of the demand curve could be caused by a(n): A...

    9. A shift to the right of the demand curve could be caused by a(n): A decrease in tastes or preferences. B decrease in the price of a substitute. C increase in income if the good is normal. D increase in the price of a complement. 10. Suppose that summer in a resort town is very rainy. We can expect demand to shift and the equilibrium price for hotels to . A left; fall B left; rise C right; fall...

  • Explain Q 12 Why cant i answer that cut government spending decrease the demand. ont giver mort spending derease Int...

    Explain Q 12 Why cant i answer that cut government spending decrease the demand. ont giver mort spending derease Interest rate thent Suppose that the new Prime Minister acts to cut government spending and, by doing so, eliminate the current federal government budget deficit. 12. In the loanable funds market, in which direction does the relevant curve shift? The supply curve for loanable funds shifting to the right there are more funds supplied at any given interest rate. 13. Does...

  • 7.   Suppose that Canada imposes an import quota on automobiles. In the open-economy macroeconomic model, which of...

    7.   Suppose that Canada imposes an import quota on automobiles. In the open-economy macroeconomic model, which of the following curves would this quota shift? a. supply of loanable funds left b. demand for loanable funds left c. demand for Canadian dollars right d. supply of Canadian dollars left 8.   Suppose the Canadian government imposed import quotas on agricultural products. According to the foreign-currency exchange market diagram, which of the following outcomes would most likely result? a. Both the demand and supply curves...

  • 30. If there is an excess demand for money using the liquidity preference theory) A. Individual...

    30. If there is an excess demand for money using the liquidity preference theory) A. Individual sell bonds causing interest rates to fall B. Individuals sell bonds causing interest rates to rise C. Individuals buy bond causing interest rates to fall D. Individuals buy bonds causing interest rates to rise 31. If the money demand curve shifts to the left. Interest rates ----and bond prices A. Fall; rise B. Fall; fall C. Rise; rise D. Rise;fall 32. When the growth...

  • 22. If the expected returns on commodities falls, while the expected returns on bonds do not...

    22. If the expected returns on commodities falls, while the expected returns on bonds do not change, then A) the demand curve for bonds will shift to the left. B) the supply curve for loanable funds will shift to the right. C) the equilibrium interest rate will fall. D) the equilibrium price will rise.

  • 1) The price of pepsi rises...what will happen to the demand for coke: a) the quantity...

    1) The price of pepsi rises...what will happen to the demand for coke: a) the quantity demanded of coke will increase b) more coke will be sold at each price c) the demand curve for coke will shift to the right d) the demand curve for coke will shift to the left e) b and c 18) Which items are included in GDP?: a) sales of crack cocaine on a street corner next to Peet's coffee b) a prostitute's legal...

  • 1. If demand deceases and supply remains constant, what happens to the market equilibrium? A. Quantity...

    1. If demand deceases and supply remains constant, what happens to the market equilibrium? A. Quantity and price both rise. B. neither price or quantity will change C. Quantity and price both fall. D. Quantity rises and price falls. 2. A positive statement is A. an opinion B. a value judgement. C. can be shown to be correct or incorrect. D. based upon what can be demonstrated to be true. 3. If a technology change reduces a company's production costs,...

  • \ **each option is fall or rise // or increase or decrease *** causes the gov...

    \ **each option is fall or rise // or increase or decrease *** causes the gov to run a budget SURPLUS or Deficit (options) **** last they want the graph curve shifted to reflect Scenario 3 10. The market for loanable funds and government policy The following graph shows the market for loanable funds. For each of the given scenarios, adjust the appropriate curve on the graph to help you complete the questions that follow. Treat each scenario separately by...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT