Factors that lead to worsening conditions in financial markets include:

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The deterioration in banks' balance sheets can lead to worsening conditions in financial markets as it may cause a decrease in the availability of credit, which can impact the overall economy. Declining interest rates and increases in bond prices can actually have a positive effect on financial markets, while unanticipated increases in the price level could cause inflation but may not necessarily lead to worsening conditions in financial markets.

Factors That Lead to Worsening Conditions in Financial Markets Include