9-Chp5-Econ3310 - Bond Market Equilibrium Interest Rates...

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Unformatted text preview: Bond Market Equilibrium Interest Rates Market for Money: LPF Equilibrium Interest Rates in LPF When B d < B s : excess supply; price will fall and interest rate will rise When B d > B s : excess demand; price will rise and interest rate will fall When B d = B s : equilibrium (or market clearing) price and interest rate Occurs when the amount that people are willing to buy (demand) equals the amount that people are willing to sell (supply) at a given price Bond Market Equilibrium Asset Demand ...
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This note was uploaded on 02/14/2012 for the course ECON 3310 taught by Professor Dix during the Fall '08 term at York University.

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