You read in the financial press that market participants expect stock prices to increase dramatically in the near future, while at the same time business confidence is increasing. Explain in words what will happen in the bond market if the first change is larger in magnitude than the second.

You are given the following information about aggregate demand at the existing price level for an economy: (1) consumption = $400 billion, (2) investment = $40 billion, (3) government purchases = $90 billion, and (4) net export = $25 billion. if the full-employment level of gdp for this economy is $600 billion, then what combination of actions would be most consistent with closing the gdp gap here?