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.
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.
- Winter '09