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How would each of the following affect the demand for money? a tax on bonds held...

How would each of the following affect the demand for money? a tax on bonds held by individuals a forecast by the Central bank that interest rates will rise sharply in the next quarter

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A tax on bonds held by individuals: This will decrease the demand for bonds because individuals will have to pay taxes if they hold bonds. So, they would prefer to hold money in hand. So, the demand for money rises in this case and demand curve for money shift to right.

A forecast by the Central bank that interest rates will rise sharply in the next quarter: This means that, interest rates on bonds will rise, so people will start buying bonds and demand less money. So, the demand for money falls because they will get more returns on holding bonds.

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