A recent purchaser of a bond that agrees to pay an annual nominal amount would hope that interest rates do not rise
What will be an ideal response?
True, for two reasons. First, the person is locked into a lower interest rate. Second, if the person needs to sell the bond, he will incur a loss since at higher interest rates, bond prices fall.
Economics
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Suppose you can earn 5 percent on your savings account if you deposit $500 in it. The inflation rate is 3 percent. The opportunity cost of holding the $500 as money is
A) $100. B) $525. C) $80. D) $30. E) $25.
Economics
A problem when implementing countercyclical fiscal policy is
a. knowing where the turning point is b. defining the accelerator c. identifying which multiplier to use d. knowing when the balanced budget multiplier equals 1.0 e. finding the natural unemployment rate
Economics