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An increased risk of a financial crisis in the euro area should cause the a) demand for all government securities including U
An increased risk of a financial crisis in the euro area should cause the
a) demand for all government securities including U.S. Treasury securities to decrease.
b) risk spread between U.S. Treasury bonds and other bonds to decrease.
c) price of U.S. Treasury bonds to increase and the yield on other bonds to decrease.
d) price of U.S. Treasury bonds to increase and the yield on other bonds to increase.
Expert Solution
d) price of U.S. Treasury bonds to increase and the yield on other bonds to increase.
US treasuries should be in more demand causing their yields to drop and price to increase
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