Would treasury decision have more or less pronounced impact

Reference no: EM131225897

Segmented Markets Theory:

Suppose that the Treasury decides to finance its deficit with mostly longterm funds.

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

If short-term and long-term markets were segmented, would the Treasury's decision have a more or less pronounced impact on the term structure? Explain.

Reference no: EM131225897

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