ECON 0280: Introduction to Money and Banking Problem Set 3—Ball Chapter 4 1. Ball Problem Set, Page 117-118: 1, 4, 6 2. Using both the liquidity preference framework and the supply and demand for bonds framework, show why interest rates are procyclical (i.e. interest rates rise in expansions and vice versa.) 3. Ben ”Printing Press” Bernanke at the Federal Reserve announces that interest rates will rise sharply next year, and the market believes him.
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