A differenciation strategy that is aimed at increasing perceived value of goods and services by the customer usually fares best in a more flexible structure and a culture of innovation.
<h3>What is differenciation strategy?</h3>
Differentiation strategy involves designing a new product or doing something new which is much different from what the competitors do.
The uniqueness of the product could be in the branding and packaging which will tend to attract more customers.
Therefore, differenciation strategy that is aimed at increasing perceived value of goods and services by the customer usually fares best in a more flexible structure and a culture of innovation.
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Answer:
Expectations:
- Interest rates to increase
- Prices of existing bonds to decrease
Explanation:
The price of loanable fund is the interest rates, so if the demand is expected to increase and the supply is expected to decrease as any other good, the price (interest rates) is expected to increase.
And if the interest rates are expected to increase, so does the discount rate used in the bond pricing formula, known as the bond's yield to maturity (YTM), so the bonds prices are expected to decrease.
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