Explain in detail what effect a Fed sale of bonds will have on: (1 ) the LM curve; and (2 ) the IS curve
What will be an ideal response?
A Fed sale of bonds will cause a reduction in H and a reduction in the money supply. This will cause an excess demand for money and the interest rate must increase to restore money market equilibrium. The LM curve will shift up as a result of this to reflect the now higher interest rate. The IS curve does not shift as a result of this. We would simply observe a movement along the IS curve.
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Scholars know the national origins of Americans at the end of the colonial period because
(a) the study of surnames provides the necessary information. (b) people had to declare their country of origin when entering the colonies. (c) tax laws required this information. (d) an annual census provided this information.
One "design principle" that makes informal, community-based solutions to public goods and common resource problems more effective is:
A. the government setting clear rules for use. B. individual pledges to self-monitor their actions. C. clear distinctions between who is and is not allowed to access the resource. D. All of these are important to the effectiveness of community-based solutions.