(A) The Federal Reserve publishes a forecast indicating that the inflation rate will average 4% over the next 5 years. Previously, the Fed had been forecasting an inflation rate of 2%.

• Bond demand curve ["shift left", "shift right", "remain unchanged"]
• Bond supply curve ["shift right", "shift left", "remain unchanged"]
• Equilibrium price ["decrease", "increase", "remain unchanged", "uncertain"]
• Equilibrium interest rate ["increase", "decrease", "remain unchanged", "uncertain"]

(B) Asimultaneously decrease in both the government deficit and the riskiness of bond.

• Bond demand curve ["shift right", "shift left", "remain unchanged"]
• Bond supply curve ["shift left", "shift right", "remain unchanged"]
• Equilibrium price ["increase", "decrease", "remain unchanged", "uncertain"]
• Equilibrium interest rate ["decrease", "increase", "remain unchanged", "uncertain"]