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Describe the Relationship Between Interest Rate Changes and Bond Prices

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Describe the relationship between interest rate changes and bond prices.


Definitions:

Inflation Rate

The magnitude of price escalation for goods and services across the board, causing a drop in consumer purchasing prowess.

Inflation Rate

The percentage increase in the general price level of goods and services in an economy over a given period, often measured annually.

GDP Deflator

An assessment tool for the prices of all new, domestically created, final goods and services in an economy.

Inventory

The total amount of goods and materials held in stock by a business.

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