Interest Rate 8765432 11 0 Sm Dm 100 200 300 400 500 600 Quantity of Money ($ billions) If the interest rate was 8 percent, people would: sell bonds, which would cause bond prices to fall and the interest rate to fall buy bonds, which would cause bond prices to rise and the interest rate to fall have insufficient liquidity, which would cause them to reduce their spending on consumer goods buy bonds, which would cause bond prices to fall and the interest rate to rise sell bonds, which would cause bond prices to fall and the interest rate to rise

Interest Rate 8765432 11 0 Sm Dm 100 200 300 400 500 600 Quantity of Money ($ billions) If the interest rate was 8 percent, people would: sell bonds, which would cause bond prices to fall and the interest rate to fall buy bonds, which would cause bond prices to rise and the interest rate to fall have insufficient liquidity, which would cause them to reduce their spending on consumer goods buy bonds, which would cause bond prices to fall and the interest rate to rise sell bonds, which would cause bond prices to fall and the interest rate to rise

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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