Q1. Explain and show graphically the effect on the supply and demand for Bonds in a deflationary period. What is the effect on interest rates and the quantity of bonds?
Q2. A simple linear regression function, Y = 20 - 0.05X, where Y denotes the sales of gas (x 1,000 gallons) and X denotes the gas price ($ per gallon). We can estimate that one-dollar increases in gas price will decrease the sales.