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Use the bond market model (and illustrate with diagrams ) to answer the following: Suppose the Canadian government decides to finance its budget deficits by
- Use the bond market model (and illustrate with diagrams) to answer the following:
- Suppose the Canadian government decides to finance its budget deficits by increasing the amount of government debt outstanding. How would this development affect the Canadian bond market?
- According to many analysts the Canadian real estate market is expected to weaken. Using the bond market model, determine the impact of this expected weakening of the real estate market on bond prices and yields.
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