1. First, the curve will become more elastic. 2. Secondly, the curve will become more unstable. 3. At interest rate Oi, where the speculative demand is perfectly elastic, the LM curve becomes horizontal. 4. As a result, the curve has become a second-tier pitch. 5. The economy will improve and the yield curve will become less attractive in the future, though that could be six months or a few years from now. |
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