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Consider a struggling emerging-market economy where, in contrast to developed economies, the perceived risk associated with holding sovereign bonds is affected by the state of
Consider a struggling emerging-market economy where, in contrast to developed economies, the perceived risk associated with holding sovereign bonds is affected by the state of the economy. Suppose vast quantities of valuable minerals were unexpectedly discovered on government-owned land. How might the governments bond rating be affected? Using the model of demand and supply for bonds, what would you expect to happen to the bond yields of that countrys government bonds?
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