The demand curve for bonds would be shifted to the left by
A) an increase in expected returns on other assets.
B) a decrease in the information costs of bonds relative to other assets.
C) a decrease in expected inflation.
D) an increase in the liquidity of bonds relative to other assets.
A
You might also like to view...
If consumption spending is greater than national income,
a. saving is positive b. dissaving occurs c. saving is exactly zero d. a depression results e. investment is greater than saving
Initially, the economy is in long-run equilibrium. The aggregate demand curve then shifts $80 billion to the left. The government wants to change spending to offset this decrease in demand. The MPC is 0.75 . Suppose the effect on aggregate demand of a tax change is 3/4 as strong as the effect of a change in government expenditure. There is no crowding out and no accelerator effect. What should
the government do if it wants to offset the decrease in real GDP? a. Raise both taxes and expenditures by $80 billion dollars. b. Raise both taxes and expenditures by $10 billion dollars. c. Reduce both taxes and expenditures by $80 billion dollars. d. Reduce both taxes and expenditures by $10 billion dollars.