Relating bond prices to interest rates In this assignment, you are going to calculate bond prices and interest rates using the demand and supply theory of bonds. For each question below, show the impact on interest rates if: 1. Government borrowing increases due to a deficit budget 2. Borrowers and lenders expect the economy to grow 3. Bonds are perceived to be more liquid than other assets Relating bond prices to interest rates In this assignment, you are going to calculate bond prices and interest rates using the demand and supply theory of bonds. For each question below, show the impact on interest rates if: 1. Government borrowing increases due to a deficit budget 2. Borrowers and lenders expect the economy to grow 3. Bonds are perceived to be more liquid than other assets