1. Using the bond supply/bond demand model, graphically illustrate and explain the impact on I and q if the government were to simultaneously increase the personal income tax and the corporate profits tax to pay for everyone to have a “free” college education.

2. Using the loan able funds model, graphically illustrate and explain the impact on i and q if all bond trade (paid by the buyer) are abolished.

3. using either model graphically illustrate and explain the impact on i and q of the impact on the bond market of a “normal” business cycle expansion.

Answer rating: 100% (QA)

1 The bond demand and supply curve shows the relationship between the bond demand and bond supply and states that the market price of the bond is inversely related to its interest rates ie everything ... View the full answer