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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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