If the Federal reserve decides to reduce the money supply through open market operations, then the price of bonds will _____ and the rate of return for bonds will _____ increase or decrease?

If the Federal reserve decides to reduce the money supply through open market operations, then the price of bonds will _ and the rate of return for bonds will _ increase or decrease?

Macroeconomics

13th Edition

ISBN:9781337617390

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter14: Money And The Economy

Section: Chapter Questions

Problem 14QP

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Question

If the Federal reserve decides to reduce the money supply through open market operations, then the price of bonds will _____ and the rate of return for bonds will _____

increase or decrease?

Definition Definition Percentage gain or loss from a specific investment over time. The rate of return is the difference between the closing and initial values of an investment divided by the initial value of the investment. The closing value includes any intermediate cash flows such as dividends or interest amounts.

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