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1. Use the supply and demand model for bonds developed in Module 3 to analyze the effect increase in expected inflation on the price of

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1. Use the supply and demand model for bonds developed in Module 3 to analyze the effect increase in expected inflation on the price of bonds and the interest rate. Please see Chap of the textbook and watch the videos for help. (8 points) 2. Use the supply and demand model for loanable funds developed in Module 3 to analyze effect of a government budget deficit on the interest rate. Please see Chapter 3 of the textbo and watch the videos for help. (6 points) 3. Assume that you own a 10-year, $10,000 US Treasury bond with a coupon rate of 3%. The are two years left to maturity, and you are planning to sell the bond in the secondary market. I the interest rate is 5%, how much can you expect to get for the bond? Please show your work (6 points)

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