This topic contains a solution. Click here to go to the answer

Author Question: What happens to the price of bonds when the Fed is selling bonds? What happens to the interest rate? ... (Read 137 times)

jjjetplane

  • Hero Member
  • *****
  • Posts: 556
What happens to the price of bonds when the Fed is selling bonds? What happens to the interest rate? What happens to the money supply?
 
  What will be an ideal response?

Question 2

When money serves as a standard for comparing values of different things, it is functioning as a
 
  A) store of value.
  B) hedge against inflation.
  C) standard of deferred payment.
  D) unit of accounting.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

AISCAMPING

  • Sr. Member
  • ****
  • Posts: 347
Answer to Question 1

If the Fed sells bonds, the supply of bonds in the market increases, causing the price of bonds to fall. Since the price of bonds is inversely related to the interest rate, the interest rate increases. The Fed sells bonds to reduce the money supply.

Answer to Question 2

D




jjjetplane

  • Member
  • Posts: 556
Reply 2 on: Jun 29, 2018
Wow, this really help


aruss1303

  • Member
  • Posts: 314
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

Between 1999 and 2012, American adults with high total cholesterol decreased from 18.3% to 12.9%

Did you know?

Illness; diuretics; laxative abuse; hot weather; exercise; sweating; caffeine; alcoholic beverages; starvation diets; inadequate carbohydrate consumption; and diets high in protein, salt, or fiber can cause people to become dehydrated.

Did you know?

As of mid-2016, 18.2 million people were receiving advanced retroviral therapy (ART) worldwide. This represents between 43–50% of the 34–39.8 million people living with HIV.

Did you know?

Signs and symptoms of a drug overdose include losing consciousness, fever or sweating, breathing problems, abnormal pulse, and changes in skin color.

Did you know?

Walt Disney helped combat malaria by making an animated film in 1943 called The Winged Scourge. This short film starred the seven dwarfs and taught children that mosquitos transmit malaria, which is a very bad disease. It advocated the killing of mosquitos to stop the disease.

For a complete list of videos, visit our video library