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Expanding and falling during recessions

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Reference no: EM131243430

Using the liquidity preference framework, show why interest rates are procyclical (rising when the economy is expanding and falling during recessions). A graph is required for this part of the question. Make sure that you label the graph-axes, curves, and significant points-appropriately. Make sure also that you include a few sentences by way of explanation.

Reference no: EM131243430

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