The government shutdown c

The government shutdown c

The government shutdown caused 800,000 government workers to be laid off. As well, many contractors remained unpaid. This had several effects. For instance, government employees and contractors spent less money and they also had to dip into their savings to pay their bills while they were not receiving a paycheck. If the shutdown had gone on for a significant amount of time, what would the effect have been on the simple market for bonds we discussed in class? What should happen to the equilibrium price, interest rate, and quantity of bonds? Ignore any effect on the budget deficit. You need graph(s) and a brief written explanation to answer this question.

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