Question Details

This happened because inflation turned out to be 



1. "A chorus of inflation-related worries pushed down stocks, bonds and the dollar. The bellwether 30-year Treasury bond, for example, ____ $12.50 per $1,000 bond. Traders blamed the broad-based change on worries that the Federal Reserve might be preparing to _________. The blanks are best filled with 
a) rose; tighten monetary policy b) rose; loosen monetary policy 
c) fell; tighten monetary policy d) fell; loosen monetary policy 
2. "Bond prices edged lower as investors trimmed holdings ahead of today's monthly U.S. jobs report." Investors are worried that the monthly jobs report may show 79 
a) strong job growth b) weak job growth c) no job growth d) a decline in jobs 
3. "On Wall street, inflation alarms are ringing. Higher inflation is on the way, warns one trader who expects inflation to rise to 5 percent next year. Judging from market action in recent days, many other bond traders seem to agree." Bond traders must have been 
a) selling bonds, raising the interest rate b) selling bonds, lowering the interest rate 
c) buying bonds, raising the interest rate d) buying bonds, lowering the interest rate 
4. "The U.S. bond market is betting that inflation is about to pick up, shortening the odds that the Federal Reserve will soon _______" 
What is happening to prices on the bond market, and how is the blank is best filled ? 
a) prices are increasing; raise interest rates b) prices are increasing; lower interest rates 
c) prices are decreasing; raise interest rates d) prices are decreasing; lower interest rates 
5. "Based on last year's inflation expectations, lenders and borrowers agreed on the nominal interest rate to be paid on loans. But now, in retrospect, borrowers are clear losers.." This happened because inflation turned out to be 
a) higher than expected b) lower than expected 
c) exactly as expected c) more volatile than expected



Economics Assignment Help, Economics Homework help, Economics Study Help, Economics Course Help