Question
For each situation indicate how the supply / demand curves for bonds shift as well as the bond price and yields change. For example, does
For each situation indicate how the supply / demand curves for bonds shift as well as the bond price and yields change. For example, does the demand curve change to the right or left or does the supply curve change to the right or left, or both change. Then how do prices and yields change.
1. A decline in brokerage commission on bonds.
2. Expected inflation rises.
3. There is a new tax on purchases and sales of gold.
4. The federal budget deficit increases.
5. Business people become more optimistic about the success of their investments in a new plant and equipment.
6. Bond prices become more volatile.
7. The economy booms and wealth rises.
8. Stock prices become more volatile.
9. People suddenly expect a bear market for stocks.
10. People suddenly expect interest rates to rise.
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