A consumer, who is initially a lender, remains a lender even after a decline in interest rates.
Question:
A consumer, who is initially a lender, remains a lender even after a decline in interest rates. Is this consumer better off or worse off after the change in interest rates? If the consumer becomes a borrower after the change is he better off or worse off?
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 46% (13 reviews)
In order to remain a lender after the change in interest rates the consumer must be choosing a poin...View the full answer
Answered By
Anurag Agrawal
I am a highly enthusiastic person who likes to explain concepts in simplified language. Be it in my job role as a manager of 4 people or when I used to take classes for specially able kids at our university. I did this continuously for 3 years and my god, that was so fulfilling. Sometimes I've skipped my own classes just to teach these kids and help them get their fair share of opportunities, which they would have missed out on. This was the key driver for me during that time. But since I've joined my job I wasn't able to make time for my passion of teaching due to hectic schedules. But now I've made a commitment to teach for at least an hour a day.
I am highly proficient in school level math and science and reasonably good for college level. In addition to this I am especially interested in courses related to finance and economics. In quest to learn I recently gave the CFA level 1 in Dec 19, hopefully I'll clear it. Finger's crossed :)
4.80+
2+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
Suppose that the government introduces a tax on interest earnings. That is, borrowers face a real interest rate of r before and after the tax is introduced, but lenders receive an interest rate of (1...
-
In what way could the international flow of funds cause a decline in interest rates?
-
a. Boca asks you to assess its exposure to interest rate risk. Describe how Boca will be affected by rising interest rates and by a decline in interest rates. b. Given the information about the yield...
-
On January 1, 2011, Devco acquired cum div. all the shares of Brooke, at which date the equity and liability sections of Brookes statement of financial position showed the following balances: Share...
-
This case describes a small company that has grown large enough to need a full-time HR person. You have been selected to be the HR Manager, and you have to decide what HR activities are needed and...
-
The thickness of the germanium (density 5.32 gm/c m 3 ) layer in a triple-junction PV is typically greater than 100 microns. If the overall cell efficiency is 40%, how many watts of PV capacity...
-
If there are conflicting priorities and disagreements among members of the IT steering committee, how might they be resolved?
-
Use the following income statements and balance sheets to calculate Garnet Inc.'s free cash flow for 2011. GarnetInc. Income State ment 2011 2010 $500,0 Net sales $530.0 Costs (except depreciation)...
-
write a java code to print the following output:- 1 1 1 1 1 1 1 1 1 1 1 1 11 1 1 1 1 1 1 1 1
-
Which of the graphs in Fig. Q25.12 best illustrates the current I in a real resistor as a function of the potential difference V across it? Explain. Figure Q25.12 (a) (b) (c) (d)
-
Suppose asset A can be sold for $11 next period. If assets similar to A are paying a rate of return of 10%, what must be asset As current price?
-
What is the present value of $100 one year from now if the interest rate is 10%? What is the present value if the interest rate is 5%?
-
In Exercises find the derivative of the function. y = x(6 -2x )
-
amshika used her own automobile, which she purchased many years ago for some of the travel. In 2023, she drove 32,000 kilometres, with 16,000 of these related to her travel for GGI and the remaining...
-
Columbia Sportswear Company reported the following in recent balance sheets (amounts in millions). December 31, 2018 (in millions) Assets. Current Assets Cash Accounts Receivable Inventory Prepaid...
-
up (x). Find lim sup 818 2 (273), n 1. , where x = (-1)"+ 2cos n- 11
-
A pharmaceutical drug is currently undergoing testing. The three-stage FDA approval process lays out the hurdles that have to be passed for this drug to be commercially sold, and failure at any of...
-
For an unconstrained particle, Lagrange's equations were derived in cylindrical coordinates as d OT T R F.eR = QR, d (27) = M E3 = Q0 dt ao. d OT dt a. = Fk = Qz (a) Expand the first of these...
-
For the first 40 Super Bowl games, the winner is listed in file XR14060 according to 1 (American Conference) or 2 (National Conference). At the 0.05 level of significance, can this sequence be...
-
An interest bearing promissory note for 90 days at 5.6% p.a. has a face value of $120,000. If the note is discounted 20 days after the issue date at a rate of 6.8% p.a., calculate the amount of...
-
Consider the following possible schemes for taxing a monopoly: i. A proportional tax on profits ii. A tax on each unit produced iii. A proportional tax on the gap between price and marginal cost a....
-
Bruce runs the only bar in town. An individual consumers demand for bar drinks is Q = 8 P. The associated marginal revenue curve for this consumer is MR = 8 2Q. The bars marginal cost is $2 per...
-
Because of the huge fixed cost of running pipes to everyones home, natural gas is a natural monopoly. Suppose demand is Q = 100 P and marginal revenue is MR = 100 2Q. Suppose marginal cost is $20,...
-
Going back to this week's recording, revise what you learnt about the doctrine of precedent. In the famous House of Lords case of Donoghue v Stevenson [1932] AC 562, the Court determined that the...
-
Joker invites Batman and Robin to his home for tea. Peter Paralegal who is also attending the meeting, presents a will he prepared. He asks Batman and Robin to be physically present when Joker signs...
-
Agencies have been entrusted with a vast amount of power to carry out their missions. Social changes can quickly develop as a result of changes in laws or public policy. During times of rapid changes...
Study smarter with the SolutionInn App