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24Chp6-Econ3310 - Asset Demand Equilibrium Interest Rates...

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Asset Demand Bond Market Equilibrium Interest Rates Market for Money: LPF Equilibrium Interest Rates in LPF EXCESS SUPPLY: if M s > M d , people hold more cash than desired want to buy more bonds Excess demand in the bond market Demand for bonds must decrease along the bond demand curve The price of bonds increases.
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