Exam #1
a)(10 points) In the space below, draw a bond market diagram and . explain. why bond demand has the slope that it has and . explain. why bond supply has the slope that it has. BOND DEMAND SLOPES DOWNWARD SINCE WHEN PRICES FALL, INTEREST RATES RISE MAKING BONDS RELATIVELY MORE ATTRACTIVE - RELATIVE MORE ATTRACTIVE TO SUBSTITUTES AS IN OTHER ... ................
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