Question: 8 . Changes in supply and demand for bonds Identify which side of the bond market is affected by each of the following changes. Change

8. Changes in supply and demand for bonds
Identify which side of the bond market is affected by each of the following changes.
Change
Supply
Demand
Liquidity of bonds
Government budget deficits
Relative returns on bonds
Business expectations
Investment tax treatment
Relative riskiness of bonds
Expected inflation
Information costs incurred by investors
Wealth levels in society
Suppose that relative return on bond decreases.
Adjust the following graph to illustrate the effect of the change on the bond market.
Demand
Supply
PRICE
QUANTITY
Demand
Supply

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