Equilibrium price and equilibrium quantity of bonds

3.3 Explain what will happen to the equilibrium price and equilibrium quantity of bonds in each of the following situations. (If it is uncertain in which direction either the equilibrium price or equilibrium quantity will change, explain why.)

  1. Wealth in the economy increases at the same time that Congress raises the corporate income tax.
  2. The economy experiences a business cycle expansion.
  3. The expected rate of inflation decreases.
  4. The federal government runs a budget deficit.

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