An decrease in the relative riskiness of bonds while the government increases its borrowing because of mounting

Fantastic news! We've Found the answer you've been seeking!

Question:

An decrease in the relative riskiness of bonds while the government increases its borrowing because of mounting deficits

will lead to an unambiguous increase in interest rates.
will lead to an unambiguous decrease in interest rates.
there is insufficient information to infer about the effects on interest rates.
will never have any effect on interest rates.

Related Book For answer-question

Microeconomics An Intuitive Approach with Calculus

ISBN: 978-0538453257

1st edition

Authors: Thomas Nechyba

See More Books

Posted Date: Feb 03, 2023 04:57 AM

See More Questions

Will there be an effect on interest rates if brokerage commissions on stocks fall? Explain your answer.
Discuss the relative riskiness of investment in bonds, common stock, and preferred stock.
Is there enough evidence to infer that government workers have higher incomes (INCOME) than do private-sector workers?
b) A firm produces two types of sugar, A and B at a constant average cost of RM 2 and RM3 per kilogram, respectively. The quantities, q and qg (in kilogram) of A and B that can be sold each week are...
Are market supply curves typically more elastic in the short run or in the long run? Explain.
Unfortunately disasters and emergencies can provide opportunities for malicious employees to take advantage of the chaos and perform criminal activity such as stealing information or looting physical...
Consider a market with two securities, one of them risk free with rate of return $R$, and three future states. Suppose that the risky security has a present value $S_{1}$ and can take three...
The Easy Drive Car Rental Agency needs 500 new cars in its Nashville operation and 300 new cars in Jacksonville, and it currently has 400 new cars in both Atlanta and Birmingham. It costs $30 to move...
You are preparing the 2 0 2 0 tax return for Mr . and Mrs . Gumball, who are both over age 6 5 . Their AGI was $ 2 2 , 0 0 0 . What amount may they use as a credit for the elderly? They file a joint...
Alpha Company receives.A note from one of its customers. It is a $20,000 60 day note at 9% interest (ordinary time). What will be the maturity value of the note when it is collected?
Your cousin went and replaced the two plasma screen TVs with two new LCD TVs, and watches the same amount of TV each day as before. How long will it take to save $400 in energy? Calculate using the...
Suppose that the market demand for medical care is summarized by the demand function: and the market supply is summarized by the supply function: (a) Calculate the equilibrium quantity and price,...
What does the term moral hazard mean? Give examples.
In the Akerlof example, the individuals are treated as indifferent to risk. What would you expect to see in these markets if individuals wanted to avoid risk? What if there were some risk lovers?
Blue Cross plans typically have practiced community rating. If other insurance fi rms are seeking healthier patients at reduced rates, what impact will this have on Blue Cross net revenues? Why?
A Draw up trading account parts of the income statement using each of the three methods from the details in Question 29.3. Question 29.3 From the following figures calculate the closing...
Determine which of x, x2, and x3 are eigenvectors for the matrix A. For those that are, determine the associated eigenvalue. (For each -1 2 *-[33] [3] [3]-[] A= X X =
Anne is employed by Bradley Contracting Company. Bradley has a $1.3 million contract to build a small group of outbuildings in a national park. Anne alleges that Bradley Contracting has discriminated...
Consider a person who is thinking about whether to engage in a life of crime. He knows that, if he gets caught, he will be in jail and will sustain a consumption level of x0 but if he does not get...
Confirmation Bias, Politics, Research and Last-Minute Studying: Individuals have lots of assumptions about the way the world works, assumptions that help frame how they make decisions. These...
In representative democracies where legislators represent geographic districts in legislative bodies (such as the U.S. House of Representatives), we often hear of pork barrel spending. Typically,...
Wallace and Hussain type estimators for the variance components of a one-way unbalanced panel data model. (a) Verify the $E\left(\widehat{q}_{1} ight)$ and $E\left(\widehat{q}_{2} ight)$...
Using the Monte Carlo setup for the unbalanced one-way error component model considered by Baltagi and Chang (1994), compare the various estimators of the variance components and the regression...
Using the Harrison and Rubinfeld (1978) data published in Belsley, Kuh and Welsch (1980) and provided on the Springer website as Hedonic.xls, reproduce Table 9.1. Perform the Hausman test based on...

An decrease in the relative riskiness of bonds while the government increases its borrowing because of mounting

Question:

Expert Answer:

The detailed answer for the above question is provided below Correct ans... View the full answer

Microeconomics An Intuitive Approach with Calculus

Students also viewed these accounting questions