This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: What happens to the price of bonds when the Fed is selling bonds? What happens to the interest rate? ... (Read 89 times)

jjjetplane

  • Hero Member
  • *****
  • Posts: 556
on: Jun 29, 2018
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
Reply #1 on: Jun 29, 2018
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
Thanks for the timely response, appreciate it

Alyson.hiatt@yahoo.com

  • Member
  • Posts: 354
Reply 3 on: Yesterday
Gracias!

« previous next »
 

Did you know?

There used to be a metric calendar, as well as metric clocks. The metric calendar, or "French Republican Calendar" divided the year into 12 months, but each month was divided into three 10-day weeks. Each day had 10 decimal hours. Each hour had 100 decimal minutes. Due to lack of popularity, the metric clocks and calendars were ended in 1795, three years after they had been first marketed.

Did you know?

Signs of depression include feeling sad most of the time for 2 weeks or longer; loss of interest in things normally enjoyed; lack of energy; sleep and appetite disturbances; weight changes; feelings of hopelessness, helplessness, or worthlessness; an inability to make decisions; and thoughts of death and suicide.

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

The use of salicylates dates back 2,500 years to Hippocrates's recommendation of willow bark (from which a salicylate is derived) as an aid to the pains of childbirth. However, overdosage of salicylates can harm body fluids, electrolytes, the CNS, the GI tract, the ears, the lungs, the blood, the liver, and the kidneys and cause coma or death.

Did you know?

About 60% of newborn infants in the United States are jaundiced; that is, they look yellow. Kernicterus is a form of brain damage caused by excessive jaundice. When babies begin to be affected by excessive jaundice and begin to have brain damage, they become excessively lethargic.

Wheat and Cotton Prices and Consumer Price Indexes, 1865–1896 Wheat and Cotton Prices and Consumer Price Indexes, 1865–1896
After 159 days,she paid a maturity value of $11,626, which included interest of $814. After 159 days,she paid a maturity value of $11,626, which included interest of $814.
The rate of replacement of a recessive allele d by the dominant allele D by mutation alone. Even tho The rate of replacement of a recessive allele d by the dominant allele D by mutation alone. Even tho
A mother invests $9000 in a bank account at the time of her daughter's birth. The interest is ... A mother invests $9000 in a bank account at the time of her daughter's birth. The interest is ...
Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ... Suppose the market supply curve is p = 5Q. If price increases from 10 to 15, the change in ...
Rate order question Rate order question
Video: Digestive chemicals - types & enzymes

For a complete list of videos, visit our video library