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A Decrease in Default Risk on Corporate Bonds ________ the Demand

question 21

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A decrease in default risk on corporate bonds ________ the demand for these bonds,and ________ the demand for default-free bonds,everything else held constant.


Definitions:

Physical Arousal

The physiological response of the body to stimuli, which can manifest in increased heart rate, energy, and often sexual readiness.

Schachter and Singer

Psychologists who developed the Two-Factor Theory of Emotion, which emphasizes the role of physiological arousal and cognitive labels in emotion.

Arousal and Context

A theory that suggests the interpretation of emotions or responses is influenced by the physiological state of arousal and the context in which it occurs.

Biologically Determined

Characteristics or traits that are influenced by genetic factors rather than environmental conditions.

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