If a series of defaults in the bond market make bonds riskier and as a result the

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If a series of defaults in the bond market make bonds riskier and as a result the demand for money rises, predict what will happen to interest rates and aggregate output.

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Economics of Money, Banking and Financial Markets

ISBN: 978-0321598905

9th Edition

Authors: Frederic S. Mishkin

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Question Posted: Aug 12, 2012 04:34 AM

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If a series of defaults in the bond market make bonds riskier and as a result the

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Interest rates will rise and aggregate output will fall The rise in the demand for money cr...View the full answer

Economics of Money, Banking and Financial Markets

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