What happens to the money supply

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A month later, Bob buys a $1000 government bond from the Fed with this money. A) What happens to the money supply (M1)? Does it increase or decrease? By how much? The money supply would B) How would this impact Bob's future spending? Would it increase or decrease? C) Under what circumstances would Bob be likely to buy bonds ? (describe the economy, his perceptions) D) 5 years later Bob sells the bond for $1000 and buys $1000 in common stock. Describe the differences in Bob's investment portfolio. (how does it differ; what are the risks; what are his returns)

Reference no: EM131107383

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