The demand curve and supply curve for one-year discount bonds with a face value of $1,050 are represented by the following equations: - 0.6Quantity + 1,160 Bd. Price Bs. Price Quantity + 720 Suppose that, as a result of monetary policy actions, the Federal Reserve sells 80 bonds that it holds. Assume that bond demand and money demand are held constant. Which of the following statements is true? OA. If the Fed increases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 640. OB. If the Fed decreases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 780. OC. If the Fed decreases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 840. OD. If the Fed increases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 800.

The demand curve and supply curve for one-year discount bonds with a face value of $1,050 are represented by the following equations: - 0.6Quantity + 1,160 Bd. Price Bs. Price Quantity + 720 Suppose that, as a result of monetary policy actions, the Federal Reserve sells 80 bonds that it holds. Assume that bond demand and money demand are held constant. Which of the following statements is true? OA. If the Fed increases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 640. OB. If the Fed decreases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 780. OC. If the Fed decreases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 840. OD. If the Fed increases the supply of bonds in the market by 80, at any given price, the bond supply equation will become Price = Quantity + 800.

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

ChapterD: Bond Prices And The Interest Rate

Section: Chapter Questions

Problem 1QP

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