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Multiple-choice question: Assume all bond purchasers now become long-term investors, and their investment horizons increase. According to liquidity preference theory, how would this change the

Multiple-choice question:

Assume all bond purchasers now become long-term investors, and their investment horizons increase. According to liquidity preference theory, how would this change the yield curve?

a. Yield curve becomes relatively more upward sloping

b. Yield curve becomes relatively more downward sloping

c. Yield curve unchanged

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