Question: 1 . Using both the supply and demand for bonds and liquidity preference frameworks, show how interest rates are affected when the riskiness of bonds

1. Using both the supply and demand for bonds and liquidity preference frameworks, show how
interest rates are affected when the riskiness of bonds rises. Are the results the same in the two
frameworks? (Chapter 5)
2. The demand curve and supply curve for one-year discount bonds with a face value of $1,000
are represented by the following equations (Chapter 5

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