Suppose the federal government increases its budget deficit for this year.

a)Graphically show the effects of this on the bond market and the moneymarket.

b)Initially does this budget deficit create a shortage or surplus (or neither) in the bond market and money market? Brieflyexplain.

c)In a recession Central Banks usually conduct open market purchases and they often conduct open market sales during expansions. Could this explain procyclicalinterest rates? Brieflyexplain.