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In February 2020, President Trump sent to Congress a budget proposal Price of bonds for federal spending and taxes. The budget proposal assumed that the
In February 2020, President Trump sent to Congress a budget proposal Price of bonds for federal spending and taxes. The budget proposal assumed that the growth of the U.S. economy would be faster than many economists were forecasting. (In fact, the economy was about to enter a recession caused by the Covid-19 pandemic.) If the Trump administration's forecasts of faster-than-expected economic growth had turned out to be correct, illustrate the effect on the market for corporate bonds in the United States. 1.) Using the line drawing fool, depict the impact on the supply of corporate bonds if the forecast of faster-than-expected economic growth E1 turned out to be correct. Label this line as 'S," 2.) Using the line drawing fool, depict the impact on the demand for corporate bonds if the forecast of faster-than-expected economic growth turned out to be correct. Label this line as "D," 3.) Using the point drawing fool, identify the new equilibrium in the bond market. Label this point as 'E,'. quantity of bonds (billions of dollars) Carefully follow the instructions above and only draw the required objects
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