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Problem 2 : Abdullah observes that at the current level of interest rates there is an excess supply of bonds, and therefore he anticipates an

Problem 2 :

Abdullah observes that at the current level of interest rates there is an excess supply of bonds, and therefore he anticipates an increase in the price of bonds. Is Abdullah correct? Explain in details and show your analysis on the graph below.

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Price Bd Bs Quantity of bonds

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