Question

3. What would you expect to happen to the stock of domestic bonds in the hands of the public as R and Y both increase along a stable MM curve? Explain in intuitive terms how such a change in the stock of domestic bonds in the hands of the public could be brought about

Answer 1

Answer mi * Given collect from the data * let us assume that the equations are * Now We have to explain the initiative terms in such a change The stock of domestics bonds in the hands of the public could to be brought about * These since the MM bend is more extreme than the BB bend as R and y both increment along a steady MM bend, to be intrest for local bords aight to be relied upon to increment * These are expansion sought after could be fulficled just if the national bank is eager to sell the entra local bonds to general Society