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Answer the following questions as TRUE/FALSE/UNCERTAIN. You have to explain your answer. 8. If the nominal cost of holding cash balances were to fall to

Answer the following questions as TRUE/FALSE/UNCERTAIN. You have to explain your answer.

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8. If the nominal cost of holding cash balances were to fall to zero, then the value of money must be zero. 2 9. The price of gold will be positively related to the expected inflation rate. 10. A rise in nominal interest rates reflects an increase in expected infla- tion and not an increase in real rates. 11. The supply of bonds is a negatively sloped function of the interest rate. 12. An increase in expected inflation causes the demand for bond to de- cline and the supply of bonds to increase

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