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Decision affect the term structure of interest rates

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Due to numerous factors, the U.S. national debt has grown significantly for several years. Suppose that the U.S. Treasury decided to finance the deficit with mostly long-term funds.

How could this decision affect the term structure of interest rates?

If short-term and long-term markets are segmented, would the Treasury's decision have a more or less pronounced effect on the term structure? Explain your chosen answer.

Reference no: EM131527030

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