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In: Economics

3. Draw and label the bond market graph covered in chapter 5. Then, using the graph,...

3. Draw and label the bond market graph covered in chapter 5. Then, using the graph, illustrate how the equilibrium price, yield to maturity, and quantity changes as a result of:

A) an increase in expected inflation. Explain the movement from one equilibrium to another.

B) A decrease in the riskiness of bonds. Explain the movement from one equilibrium to another.

C) an increase in the government budget deficit. Explain the movement from one equilibrium to another.

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