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1. Ceteris paribus, we should expect an excess supply of money generated by the central bank...

1. Ceteris paribus, we should expect an excess supply of money generated by the central bank to be associated with

Group of answer choices reduced levels of investment spending. none of the other answers are correct. domestic deflationary pressures. an excess demand for bonds. appreciation of the home currency.

2.

As a result of restrictive monetary policy, we should most likely expect (ceteris paribus)

Group of answer choices

appreciation of foreign currency.

increased bond prices.

depreciation of the home currency.

none of the other answers are correct.

increased level of investment.

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Answer #1

a) if the Fed has increased the money supply then the interest rate will fall and people will not invest in bonds expecting a rise in the bonds and fall in the value of bonds. this will increases the investment in the economy and depreciate the currency. the answer is none of the answer is correct.

b) "A"

A restrictive monetary policy we should expect that the interest rate will rise and bond price falls but the local currency will appreciate in the market.

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