What circumstances would bob be likely to buy bonds

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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 decreases by $1000. B) How would this impact Bob's future spending? Would it increase or decrease? Bobs future spending would increase because he will make a profit from the savings bond. 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: EM131107385

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