What is the yield to maturity of a perpetuity with a coupon of $40 and a price of $800?
What will be an ideal response?
The yield to maturity equals $40/$800 = 5%.
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In a small open economy, when exports exceed imports, all of the following are true EXCEPT
A) net capital outflows are positive. B) net exports are positive. C) domestic investment exceeds domestic saving. D) domestic output exceeds spending.
If political influences, independent of any economic forces, lead to a larger government budget deficit, what will be the effect on the loanable funds market?
a. The interest rate will rise and the amount of saving will increase. b. The interest rate will fall and the amount of saving will increase. c. The interest rate will rise and the amount of saving will decrease. d. The interest rate will fall and the amount of saving will decrease. e. The interest rate will rise but the change in saving will be ambiguous.