8. Changes in supply and demand for bonds Identify which side of the bond market is affected by each of the following changes. Change Wealth levels in society Government budget deficits Liquidity of bonds Business expectations Information costs incurred by investors Relative returns on bonds Expected inflation Investment tax treatment Relative riskiness of bonds Supply Demand 00 о Suppose that business expectations in the economy decline. Adjust the following graph to illustrate the effect of the change on the bond market. PRICE QUANTITY Supply Demand Demand Supply
8. Changes in supply and demand for bonds Identify which side of the bond market is affected by each of the following changes. Change Wealth levels in society Government budget deficits Liquidity of bonds Business expectations Information costs incurred by investors Relative returns on bonds Expected inflation Investment tax treatment Relative riskiness of bonds Supply Demand 00 о Suppose that business expectations in the economy decline. Adjust the following graph to illustrate the effect of the change on the bond market. PRICE QUANTITY Supply Demand Demand Supply
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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