Exercise to help

You need to type your answers. For questions with graphs, explain your answers using the steps that you have learned in the class. You will receive zero if your answer does not follow the steps. Explanation whit out graph is acceptable. 1. How would a tax on bond held by individuals affect the demand for money, interest rate, investment, aggregate demand, price and real GDP? 2. Trace the impact of buying more bonds by government on bond prices, interest rates, investment, aggregate demand, real GDP, unemployment, and the price level. 3. True or false, explain you answers. a) Lenders sell bonds, and borrowers buy them. b) An increase in reserve requirements raises the reserve ratio and decreases the money supply. c) When the government runs a budget decit, interest rates rise, and investment falls. d) Joan uses some of her income to buy mutual fund shares. A macroeconomist would refer to J oan's purchase as investment. 4) Jeremiah deposits in a bank an amount of $ 1000 that he had been holding at home in a jar for a long time. a. If the banking system is 100 percent reserve, how does the money supply change? b. If the reserve requirement is 10 percent and the bank holds no excess reserves, how does the money supply change? 0. If the reserve requirement is 10 percent and the bank holds an excess reserve of 2 percent, how does the money supply change