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Arroyo21 Arroyo21
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6 years ago
In November 2012, concern was raised about Spain's sovereign debt. Make use of a graph of the bond market to show how this would affect the price of Spanish bonds.
 
  What will be an ideal response?

Question 2

The Fed's portfolio of securities consists principally of
 
  A) municipal bonds.
  B) corporate bonds.
  C) U.S. Treasury obligations.
  D) obligations of foreign governments.

Question 3

Going from M0 to M1 and to M2, what is the principle?
 
  A) from household money demand to firm money demand
  B) from illiquid to liquid
  C) from most usable to least usable for transaction purposes
  D) from most usable to least usable as a store of value
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6 years ago
Answer to q. 1

Fear about the ability of Spain to make payments on its bonds will reduce the demand for Spanish bonds, leading to a decline in the price of Spanish bonds.

Answer to q. 2

C

Answer to q. 3

C
Arroyo21 Author
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6 years ago
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