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1. Problems and Applications Q1 You would expect a bond of an Eastern European government to pay V interest rate as compared to a bond of the U.S. government. You would expect a bond that repays the principal in year 2040 and a bond that repays the principal in year 2020 to pay different interest rates because of differences in the bonds' V . You would expect a bond of a software company you run in your garage to pay V interest rate as compared to a bond issued by Coca Cola. You would expect a bond issued by the federal government to pay V interest rate as compared to a bond issued by New York State. 1. Problems and Applications Q1 You would expect a bond of an Eastern European government to pay V interest rate as compared to a bond of the U.S. government. a lower You would expect a bond that repays the principal in year 2040 and . epays the principal in year 2020 to pay different interest rates because of differences in the bonds' V . a higher the same You would expect a bond of a software company you run in your gar V interest rate as compared to a bond issued by Coca Cola. You would expect a bond issued by the federal government to pay V interest rate as compared to a bond issued by New York State. 1. Problems and Applications Q1 You would expect a bond of an Eastern European government to pay V interest rate as compared to a bond of the U.S. government. You would expect a bond that repays the principal in year 2040 and a bond that repays the principal in year 2020 to pay different interest rates because of differences in the bonds' V . You would expect a bond of a softwa credit \"Sks in your garage to pay V interest rate as compared to a bond issued by Coca- Cola. terms to maturity . tax treatments _ . You would expect a bond Issued by t nt to pay V Interest rate as compared to a bond Issued by New York State. 1. Problems and Applications Q1 You would expect a bond of an Eastern European government to pay t rate as compared to a bond of the U.S. government. You would expect a bond that repays the principal in year 2040 and a bond tha the same principal in year 2020 to pay different interest rates because of differences in the bonds' V . a higher You would expect a bond of a software company you run in your garage to pay V interest rate as compared to a bond issued by Coca Cola. You would expect a bond issued by the federal government to pay V interest rate as compared to a bond issued by New York State. 1. Problems and Applications Q1 You would expect a bond of an Eastern European government to pay V interest rate as compared to a bond of the U.S. government. You would expect a bond that repays the principal in year 2040 and a bond that repays the principal in year 2020 to pay different interest rates because of differences in the bonds' V . the same You would expect a bond of a software company you run in your g a lower V interest rate as compared to a bond issued by Coca Cola. a higher You would expect a bond issued by the federal government to pay V interest rate as compared to a bond issued by New York State. 2. Problems and Applications Q2 Many workers hold large amounts of stock issued by the firms at which they work. True or False: A person might not want to hold stock in the company where he works because he should diversify his holdings to reduce his overall risk. 0 True O False 3. Problems and Applications Q3 Indicate whether each of the following descriptions represents saving or investment, as dened by a macroeconomist. Description Saving Investment This occurs when a person's income exceeds his consumption. 0 O This occurs when a person or firm purchases new capital. 0 Q Which of the following situations represent saving? Check all that apply. [3 Your family takes out a mortgage and buys a new house. C] You use your $200 paycheck to buy stock in AT&T. [3 Your roommate earns $100 and deposits it in his account at a bank. C] You borrow $1,000 from a bank to buy a car to use in your pizza delivery business. 4. Problems and Applications Q4 Suppose GDP is $9 trillion, taxes are $1.9 trillion, private saving is $0.6 trillion, and public saving is $0.3 trillion. Assuming the economy is closed, complete the following table by calculating consumption, government purchases, national saving, and investment. Amount Component (Trillions of dollars) Consumption Government Purchases National Saving UUUU Investment 5. Problems and Applications Q5 Economists in Funlandia, which has a closed economy, have collected the following information about the economy for a particular year: 12,500 9,000 2,100 = 2,200 Q~an~