The demand curve and supply curve for one-year discount bonds with a face value of $1,020 are represented by the following equations: BO Price = -0.8Quantity +1,160 B%: Price = Quantity + 700 Suppose that, as a result of monetary policy actions, the Bank of Canada sells 80 bonds that it holds. Assume that bond demand and money demand are held constant. Which of the following statements is true? O A. If the Bank decreases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 760. OB. If the Bank increases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity +780. OC. If the Bank decreases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 820. OD. If the Bank increases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity +620. Calculate the effect on the equilibrium interest rate in this market, as a result of the Bank of Canada action. The expected interest rate on a one-year discount bond will to 0% (Round your intermediate calculations to the nearest whole number. Round your final answer to two decimal places.) The demand curve and supply curve for one-year discount bonds with a face value of $1,020 are represented by the following equations: BO Price = -0.8Quantity +1,160 B%: Price = Quantity + 700 Suppose that, as a result of monetary policy actions, the Bank of Canada sells 80 bonds that it holds. Assume that bond demand and money demand are held constant. Which of the following statements is true? O A. If the Bank decreases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 760. OB. If the Bank increases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity +780. OC. If the Bank decreases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 820. OD. If the Bank increases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity +620. Calculate the effect on the equilibrium interest rate in this market, as a result of the Bank of Canada action. The expected interest rate on a one-year discount bond will to 0% (Round your intermediate calculations to the nearest whole number. Round your final answer to two decimal places.)
