3 Profitable investment opportunities. With such opportunities, firms are more willing to borrow to finance these investments.

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3 Profitable investment opportunities. With such opportunities, firms are more willing to borrow to finance these investments. When the economy is growing rapidly, investment opportunities that are expected to be profitable abound, and the quantity of bonds supplied at any given bond price increases. Thus, in an expansion, the supply of bonds increases, and the supply curve shifts to the right.

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