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Evidence shows that interest rates are procyclical (interest rates rise during economic expansions, and fall during economic contractions). Explain the statement above using either the
Evidence shows that interest rates are procyclical (interest rates rise during economic expansions, and fall during economic contractions). Explain the statement above using either the S & D for Bonds or the S & D for Credit model in your answer, showing (you need to provide a drawing or graph with the axes properly labeled and equilibrium identified) what happens to the price of bonds, the quantity of bonds and interest rates both during an expansion and during a contraction.
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