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It's in almost every bluegrass song, but I've never seen an exposition of the theory behind the major chord (minor may also be used, but I don't think I've seen it) built off of the flat 7th of the tonic.

I mostly see it preceeding majors built off of the tonic's 4th. Is that the only way to resolve its' dissonance?

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So, the chord sequence is maybe Cmaj / Bbmaj / Fmaj. The Bb is subdominant of the (subdominant of C) Fmaj. It's sort of reverse ii - V - I that jazzers are renowned to use.As actually many, many songs utilise. The Bb chord , in a way, is related to the key of C in a 'first- removed' manner.You're right in that the resolution is in 2 plagal cadences, so it sounds fine.The Hendrix song Hey Joe takes the idea a bit further, in E, but then goes C / G / D / A and back to E. Usually, I've heard the sequence move back to tonic chord the way you describe.Considering Sweet Home Alabama, it could be construed that this song uses the same plan -D /C /G., spawning the old question 'Is it in G or D' Answers on a postcard or this site, please !

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lol, and i just realized that the flat 7's fifth is the 4th's root, so it shouldn't be too hard to resolve in that case. ty very much for telling me about its' use in other songs & genres. i never knew – user6176 Apr 29 '13 at 11:52
You asked about resolving. Another way is to put a bVI between it and the dominant.As in C / Bb / Ab / G sometimes called the Spanish sequence.You've probably heard this in several songs. – Tim Apr 29 '13 at 18:36
"Sweet Home Alabama" is one of those many rock songs that is in the mixolydian mode, not the major mode. See my answer on this page. – user1044 Apr 30 '13 at 1:10
Interesting point, Wheat.It's in D mixolydian, so that makes the key signature one sharp - F#. Assuming it's written at the beginning of each stave line,that says it's in G maj., in my book. Or, would you write it 'in C' and put any F# in as accidentals ? Let's face it, G major is the mother key of D mixolydian mode, but having played this song with maybe 20 different bands, they were split 50/50 as to what the final chord should be. To me, G maj. at the end sounds like a better cadence than the alternative imperfect one i.e. it sounds like it's finished. – Tim Apr 30 '13 at 4:59
Trying to answer my own question here, just trawled through sheet music, found 20 written in 'G' and 3 ostensibly written in 'D'.All with same dots and chords.In D any C# have naturals, so maybe this is a way of saying "It's in the D mix. mode." Wheat, what's a 'major mode' (sic)? – Tim Apr 30 '13 at 6:15

The bVII or dominant bVII7 chord often comes from the mixolydian mode. Many bluegrass and rock and roll songs are written in the mixolydian and not in the major mode (or ionian mode, or major key, or major scale).

In the key of C, the mixolydian scale is

C D E F G A Bb C.

So the chord is built on the note Bb in this mode.

Since there is only one note different between the major key and the mixolydian, many people will hear a song in the mixolydian and mistakenly think that it is in the major key.

You probably know a great deal of songs in bluegrass, country and rock that have a melody in the mixolydian mode; you just never thought about it.

Here is a link to an analysis of "Sweet Home Alabama" that explains the mixolydian mode an the use of the bVII chord in this context.

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but IV is "always" a maj – user6176 May 4 '13 at 18:57
Joe Coder Guy, you have a point -- but it's the V that is unexpected, not the IV. In the way it's used in rock, in the mixolydian, V remains a major chord (although strictly speaking according to the mode you would expect the V to be minor). I don't know the music theory reason for this, but it is played that way. It's the same with the minor mode, too, in all forms of music. The major-chord V in the minor key has a raised 7th scale degree. – user1044 May 12 '13 at 1:50
It's probably to do with the leading note contained within. When it's only a semitone from the tonic, it has a more dominant effect, as in pushing towards the tonic chord. Yes, according to the scale spelling in Mix. mode, it should be a minor chord, just as it is when writing in the minor key using natural minor (Aeolian mode).There's probably no technical reason, it's more likely our Western perception of the notes resolving, as in a perfect cadence.Somehow,it's not so 'perfect' going from min.V to min.I – Tim May 13 '13 at 8:06

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