Question: 1. Using the bond demand and supply model presented, explain the impacts of the following cases on the level of interest rates. A. Economic recession.

1. Using the bond demand and supply model presented, explain the impacts of the following cases on the level of interest rates.
A. Economic recession.
B. Treasury financing of a government deficit.
2. Using the market segmentation theory, outline the impacts on the term structure of interest rates of the following cases:
A. Economic expansion
B. Treasury purchase of long-term Treasury bonds.

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