1. Some economists have said that one's income determines the amount one saves, but the interest rate determines how it is savedcash, checking accounts, savings

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1. Some economists have said that one's income determines the amount one saves, but the interest rate determines how it is saved—cash, checking accounts, savings accounts, bonds. Assess this statement.

2. Suppose the interest rate became so low that virtually everyone believed that it would soon rise. What would happen to the demand for bonds or other marketable interest-bearing financial assets? Explain.

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