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Explain What Happens in the Bond Market When the Fed

question 119

Essay

Explain what happens in the bond market when the Fed conducts an open market purchase. A complete answer should explain what happens to bond prices, the quantity of bonds traded and the interest rate. Illustrate your answer with a demand-supply graph of the bond market.


Definitions:

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A minimally invasive procedure using a three-dimensional coordinates system to locate and remove a sample of tissue for examination.

Incision

A surgical cut made in the skin or flesh to facilitate a medical procedure or treatment.

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