The government budget deficit affect supply

The government budget deficit affect supply - If you...

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The government budget deficit affect supply. As risks go up, the price of the bond goes down. If government get into the debt and need to borrow more money, then they need to keep issuing more bonds. What is meaning of clearing the market?---where the supply needs the demand in the primary market and it will also happens in the secondary market as well. If the demand doesn't change, the willingness to decrease the price is high. If you look at winter storage of winter clothing. It would anticipate the demand. The store would drop off the price for winter clothing faster than normal winter time, since we have a very dry winter. Clearing prices-- Why the secondary market is vertical on the graph? Because all the cars were already produced, no matter the price changes up and down, and the quantity for the secondary cars won't change it. For the primary market, it depends on the price. Do general business prospects affect supply or demand? The general business prospects on the future.
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Unformatted text preview: If you general wealth goes up, it will affect the demand. You can buy currencies and Greece bonds, Russian bonds, if you want to as substitute assets. Expected inflation affect on both supply and demand. Because of inflation, the purchasing power will go down. If the inflation goes on, and my purchasing power decrease year after year. If I am experiencing inflation, and I don't want to receive payment? I do want to pay mortgage payment during the inflation period. Class 7--d: In the inflation environment, I may not want to hold the bond and receive my bond payment. The demand for the bond in the inflation, it will decreases, and the supply will increases. How would interest rate affect the prices? The risk on any financial instruments, I need to be compensated. Risk premium is the amount you compensated for taking the default risk...
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