What happens to the quantity of treasury bonds when central bank sells short-term bonds?
The overall question for the assignment is: Suppose that the central bank of a country decides to increase the short-term interest rate. Discuss the transmission of this decision via financial markets. Your discussion should include the transmission to the money market, longer bond markets, wider borrowing rates, common stock prices, and the exchange rate.
However, I already got stuck at the first part...
I would highly appreciate any help with this assignment as I am very lost and I do not know if I can just apply the opposite results as when the central bank would lower the interest rate.