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Deflation—a falling price level, which would mean a negative rate of inflation—was a very real fear during the early stages of the Great Recession. Using a supply and demand analysis of bonds, explain the effect of
on the interest rate.
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