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Assume that the economy is in equilibrium. If aggregate demand decreases, nominal interest rates and bond prices will most likely change in which of the following ways?

User Dibu
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Interest rates up and bond prices down.
Higher interest rates make borrowing more expensive and thus demand from money decreases. Bond prices are inversely related to interest rates. This is a weird question because interest rates, which are set by the government, cause the change in aggregate demand not the other way around
User Dharam Budh
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