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Term Structure and the Loanable Funds Market State whether each of the follow - ing effects contribute to an increase or decrease in i )
Term Structure and the Loanable Funds Market State whether each of the follow
ing effects contribute to an increase or decrease in i the demand of shortterm funds, ii the
supply of shortterm funds, iii the demand of longterm funds, iv the supply of longterm
funds, v current shortterm rates it and vi current longterm rates it:
a Risk Effect
b Expectations Effect if future shortterm rates are expected to be constant
c Expectations Effect if future shortterm rates are expected to increase
d Expectations Effect if future shortterm rates are expected to decrease
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