Use a supply and demand graph for bonds to show the effect of each of the following situations. Show any shifts of the curves and movements in price and quantities. Additionally, mention what happens to the interest rates.
a. Firms expect an increase in their future profits
b. Both households and firms expect that their taxes will increase in the future
c. The government expects to run a surplus and hence will borrow less in the future.
d. Corporation A just received an upgrade in their credit rating from BAA to AAA.