Author Question: The Federal Reserve issues a report indicating that future inflation will be higher than had ... (Read 63 times)

lunatika · **on:** Jun 30, 2018

The Federal Reserve issues a report indicating that future inflation will be higher than had previously seemed likely. As a result

A) the supply curve for bonds shifts to the right.
B) the demand curve for loanable funds shifts to the left.
C) the equilibrium interest rate falls.
D) the equilibrium price of bonds rises.

Question 2

In what ways do futures contracts differ from forward contracts?

What will be an ideal response?

Brummell1998 · **Reply #1 on:** Jun 30, 2018

Answer to Question 1

A

Answer to Question 2

Futures contracts are traded on exchanges. Futures contracts typically specify a quantity of the underlying asset to be delivered but do not fix what the price will be on the settlement date when the asset is delivered. Futures contracts are standardized in terms of the quantity of the underlying asset to be delivered and the settlement dates for the available contracts.