Explain whether the demand curve for bonds the supply curve


For each of the following situations, explain whether the demand curve for bonds, the supply curve for bonds, or both would shift. Be sure to indicate whether the curve(s) would shift to the right or to the left.

a. The Federal Reserve publishes a forecast that the inflation rate will average 5% over the next five years. Previously, the Fed had been forecasting an inflation rate of 3%.

b. The economy experiences a period of rapid growth, with rising corporate profits.

c. The federal government runs a series of budget surpluses.

d. Investors believe that the level of risk in the stock market has declined.

e. The federal government imposes a tax of $10 per bond on bond sales and bond purchases.

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Financial Management: Explain whether the demand curve for bonds the supply curve
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