Top Posters
Since Sunday
o
5
5
b
4
s
3
j
3
b
3
m
3
K
3
g
3
L
3
w
3
m
3
Home Q & A Board Other Fields Homework Help Business Economics
New Topic  
Roar Roar
wrote...
Go to Answer
Posts: 986
Rep: 0 0
6 years ago
Suppose there are two types of bonds (one-year bonds and two-year bonds) and that the yield curve is initially upward sloping in period t. Note: For this question assume that: (1) expected inflation is zero; and (2) the relevant interest rate on the vertical axis of the IS-LM model is the one-year interest rate. Based on our understanding of the IS-LM model, of the yield curve and of financial markets, we know with certainty that an announcement in period t of a partially unexpected future increase in taxes (to be implemented in period t+1) will have which of the following effects?
A) stock prices will increase in period t
B) stock prices will fall in period t
C) the yield curve will become steeper in period t
D) none of the above
Textbook 
Macroeconomics

Macroeconomics


Edition: 6th
Authors:
Read 162 times
1 Reply
Replies
Answer verified by a subject expert
vonCOLLINZOvonCOLLINZO
wrote...
#1
Top Poster
Posts: 638
Rep: 8 0
6 years ago
Sign in or Sign up in seconds to unlock everything for free
More solutions for this book are available here
1

Related Topics

Roar Author
wrote...

6 years ago
Good timing, thanks!
hmonier
wrote...

Yesterday
This helped my grade so much Perfect
Gamiung3657
wrote...

2 hours ago
Thanks
New Topic      
Quick Reply
Explore
Post your homework questions and get free online help from our incredible volunteers
  1030 People Browsing
 116 Signed Up Today
Start New Topic Take the Tour CoursesNew Study Tools Topics Trending Browse by Textbook
Live Chat
Related Images
  
 679
  
 261
  
 328
Your Opinion
Who will win the 2024 president election?
Votes: 10
Closes: November 4
Previous poll results: Who's your favorite biologist?