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Ch. 5 Quiz
2. Using the supply and demand for bonds model, illustrate graphically and describe the likely changes in "i" and
total lending if inflations expectations decreases from 8% to 2%.
3. During 2000, the government repurchased $30 billion in U.S. Treasury bonds outstanding. This was the first time
this had been done since the administration of Herbert Hoover in the early 1930s. Analyze the impact of this
repurchase using the loanable funds model.