345 2012 MT with answers

L rise rise rise d l fall fall fall a b 26 in the

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Unformatted text preview: fall. fall a.) b) :26. In the three sector mode!H ·ith im·estmenl udded. a n.:cessionary decrease in everyone's tlrst period income (second pel·iod incomes constant) wil l cause the supply of corporate bonds to ~---· and the equilibrium interest rate to _ __ _ _ a l rise, necessarily rise b) f::~ll. necessarily fall c . ) ~ fmt possibly ,J:a# -;- ,,,, d l fall poss ibly fall 27. For the same recessionary shock as above. the price level ~ _ in the consumptiononly model and in the model with investment added. rises. rises b) falls. falls c l rises. changes ambiguously d) falls. changes ambiguously a.) 2X. An increase in expeetc.Q_inllatio_!1 by itself the demand for bonds. _ _ ___ the ______ the real demand for money. supply of bonds and _ reduces, incJ:eases, reduces increases, reduces. increases c.) reduces , reduces. reduces d l increases. inc!_:eas~s. leaves constant a .) b) 29. lfwc assume empirically that price flexibility increases as we mo\·e from shorter runs, it is implied that the liquidity effect of a monetary increase gets pusses and the nominal interest rlltc begins to _____ _ a. ) longer 1s time to stronger,...
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This note was uploaded on 01/19/2014 for the course ECON 345 taught by Professor Sumaila during the Winter '09 term at UBC.

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