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mhw12ANS - Question6 - Single Correct 1.0 Point In Keynes's...

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Question6 - Single Correct 1.0 Point In Keynes's liquidity preference framework, A an excess demand of bonds implies an excess demand for money. B the demand for money must equal the supply of bonds. C an excess supply of bonds implies an excess demand for money. D the demand for bonds must equal the supply of money. DEMAND FOR MONEY – HOLD BONDS OR MONEY- IF EXCESS SUPPLY OF BONDS, AT CURRENT PRICE/INTEREST RATE PUBLIC WISHES TO HOLD LESS BONDS THAN AVAILABLE, I.E. MORE MONEY Question22 - Single Correct 1.0 Point The collapse of the subprime mortgage market increased the spread between Baa and default- free U.S. Treasury bonds. This is due to A a flight to liquidity. B a reduction in risk. C a reduction in maturity. D a flight to quality. INCREASING RISK PREMIUM – HIGH REQUIRED RETURN ON BAA BONDS. THIS RESULTED FROM FEAR OF DEFAULT ON CORPORATES, HENCE LOWER DEMAND AND LOWER PRICE WHICH RAISES INTEREST RATE ON BAA. FLIGHT TO QUALITY MEANT DEMAND FOR TREASURIES INCREASED DUE TO PERCEIVED SAFETY OF THEM
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mhw12ANS - Question6 - Single Correct 1.0 Point In Keynes's...

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