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Assume = .99 for Y1 and = .98 for Y2.Answer the following, with brief explanations: What are the stock prices doing? What are bond prices

Assume = .99 for Y1 and = .98 for Y2.Answer the following, with brief explanations:

What are the stock prices doing?

What are bond prices and yields doing?

Is there an extra interest rate effect on stock prices?

How is the Cd-curve shifting?

Given your equation for the money market, explain how P moves?

Explain in words the basic forces and incentives operating in this part of business cycle.

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