Question:

Hi i have an economics related question.?

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If the money supply decreases due to a contractionary open market operation by the central bank then the price of treasury bills:

my guess is the price of treasury bills fall as the short term interest rate rises but i am not 100% sure.

Thanks in advanced for the answers.

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2 ANSWERS


  1. If you reduce the supply of something (even money) the value of it increases. The value of money is the price you have to pay to borrow it.  


  2. I am presuming that oil will dramatically increase in the future as do i believe that one should buy apple computer shares as they have an average expansion of $1Billion every quarter.

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