A5 Give me Type answer onlyI need help finding the % The demand curve and supply curve for one-year discount bonds with a face value of $1,050 arerepresented by the following equations:Bd:BS:Price = -0.7Quantity + 1,120Price = Quantity + 700Suppose that, as a result of monetary policy actions, the Federal Reserve sells 90 bonds that it holds.Assume that bond demand and money demand are held constant. Which of the following statementsis true?A. If the Fed increases the supply of bonds in the market by 90, at any given price, the bond supplyequation will become Price = Quantity + 610.B. If the Fed decreases the supply of bonds in the market by 90, at any given price, the bond supplyequation will become Price = Quantity + 830.C. If the Fed decreases the supply of bonds in the market by 90, at any given price, the bond supplyequation will become Price = Quantity + 770.D. If the Fed increases the supply of bonds in the market by 90, at any given price, the bond supplyequation will become Price = Quantity + 790.Calculate the effect on the equilibrium interest rate in this market, as a result of the Federal Reserveaction.The expected interest rate on a one-year discount bond will increase to 10.87%. (Round yourintermediate calculations to the nearest whole number. Round your final answer to two decimal places.)

The equilibrium interest rate is the interest rate at which the demand for money and the supply of…

Calculate the effect on the equilibrium interest rate in this market, as a result of the Federal Reserve action. The expected interest rate on a one-year discount bond will increase to 10.87 %. (Round your

Calculate the effect on the equilibrium interest rate in this market, as a result of the Federal Reserve action. The expected interest rate on a one-year discount bond will increase to 10.87 %. (Round your

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Give me Type answer only

I need help finding the %

The demand curve and supply curve for one-year discount bonds with a face value of $1,050 are
represented by the following equations:
Bd:
BS:
Price = -0.7Quantity + 1,120
Price = Quantity + 700
Suppose that, as a result of monetary policy actions, the Federal Reserve sells 90 bonds that it holds.
Assume that bond demand and money demand are held constant. Which of the following statements
is true?
A. If the Fed increases the supply of bonds in the market by 90, at any given price, the bond supply
equation will become Price = Quantity + 610.
B. If the Fed decreases the supply of bonds in the market by 90, at any given price, the bond supply
equation will become Price = Quantity + 830.
C. If the Fed decreases the supply of bonds in the market by 90, at any given price, the bond supply
equation will become Price = Quantity + 770.
D. If the Fed increases the supply of bonds in the market by 90, at any given price, the bond supply
equation will become Price = Quantity + 790.
Calculate the effect on the equilibrium interest rate in this market, as a result of the Federal Reserve
action.
The expected interest rate on a one-year discount bond will increase to 10.87%. (Round your
intermediate calculations to the nearest whole number. Round your final answer to two decimal places.)

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