Explain how each of the following developments would affect the supply of money, the demand for money, and the interest rate. Illustrate your answers with diagrams. a. The Fed’s bond traders buy bonds in open-market operations.

b. An increase in credit-card availability reduces the cash people hold.

c. The Federal Reserve reduces banks’ reserve requirements.

d. Households decide to hold more money to use for holiday shopping.

e. A wave of optimism boosts business investment and expands aggregate demand.

The u.s. stock market has returned an average of about 9% per year since 1900. this return works out to a real return (i.e., adjusted for inflation) of approximately 6% per year. if you invest $100,000 and you earn 6% a year on it, how much real purchasing power will you have in 30 years?

Consider the market for gasoline. suppose that, in a competitive market without government regulations, the equilibrium price of gasoline is $3.00 per gallon, and employees at gas stations earn $17.50 per hour. complete the following table by indicating whether each of the statements is an example of a price ceiling or a price floor and whether it results in a shortage or a surplus or has no effect on the price and quantity that prevail in the market. statement price control effect the government has instituted a legal minimum price of $3.40 per gallon for gasoline. the government prohibits gas stations from selling gasoline for more than $3.40 per gallon. due to new regulations, gas stations that would like to pay better wages in order to hire more workers are prohibited from paying more than $14.50 per hour.

What is the difference between secure bonds and naked bonds?