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Suppose there is a decrease in the liquidity of corporate bonds relative to US Treasury bonds....

Suppose there is a decrease in the liquidity of corporate bonds relative to US Treasury bonds. Consequently, the demand curve for U.S. Treasury bonds will shift to the ____ and the demand curve for Corporate bonds will shift to the ____.  

left; right
right; right
left; left
right; left
0 0
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Option 4
The decrease in liquidity of corporate bonds increases the demand for U S Treasury bonds and which shifts the demand curve to right for it. And decreases demand corporate bonds which shift the demand curve to left.
Liquidity is preferred by the investors so a decrease in liquidity decreases demand and vice verse.

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