Question: 1.7. Consider your answers to the previous question. When one bond pays a higher interest rate than another bond, is that mostly because savers are
1.7. Consider your answers to the previous question.
When one bond pays a higher interest rate than another bond, is that mostly because savers are less willing to supply loanable funds to the higher-rate bond, or because businesses are more interested in demanding loanable funds for the higher-rate bond? Why is this so?
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