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Social Studies, 22.02.2020 00:41 lola78830
The president of the United States announces in a press conference that he will fight the higher inflation rate with a new anti-inflation program. Predict what will happen to interest rates if the public believes him. As a result of the president's announcement, people's expectations of inflation will ▼ rise fall , which causes the demand for bonds to shift to the ▼ right left . However, the lower expected inflation rate causes the cost of borrowing to ▼ rise fall , so the supply of bonds will ▼ decrease increase , which causes the supply curve for bonds to shift to the ▼ right left . The impact of this change in bond demand and supply will cause equilibrium interest rates t
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