Three months ago you purchased, at par, a $100,000 bond with a stated interest rate of 5%. Today, the Federal Reserve announced that it is reducing the discount rate by 0.5%. How would you expect this announcement to affect the value of your bond? Explain your response.
Answer to relevant QuestionsAll other factors held constant, what would be the effect on the demand for money (M1) of each of the following situations. Explain the rationale behind your responses.1. An increase in real GDP2. An increase in general ...Explain the Consumer Price Index (CPI), the GDP Price Index, and the Producer Price Index (PPI). What does each measure? Which is most important to measuring changing price levels in an economy and why?Suppose that U and g are two twice differentiable functions of x, both of them increasing and concave, with U’ ≥ 0, U” ≤ 0, g’ ≥ 0, and g” ≤ 0. Prove that the composite function f(x) = g(U(x)) is also ...In the following payoff table, two decision makers, Gates and Dell, must make simultaneous decisions to either cooperate or not cooperate with each other. Please indicate the Nash equilibrium in the game. Does the result ...Consider the following income distributions:A) Plot the Lorenz Curves for 1990 and for 2000. Be sure to label your graph clearly.B) Calculate the Gini coefficient for 1990 and for 2000 (the area between the Lorenz curve and ...
Post your question