1.  Suppose that discount brokers make bonds more liquid. (2 points)   a. In the liquidity preference theory, how does this development...

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1.  Suppose that discount brokers make bonds more liquid. (2 points)

 

a. In the liquidity preference theory, how does this development affect money demand and the interest rates? Explain your answer verbally and illustrate it graphically using the market for money diagram

 

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