Need help with multiple choice macroeconomic question 9. A 10-year bond sells for its face value of $10,000, with an annual coupon of $250.Because of expected economic growth, the inital bondholder sells it for $12,500. Whatis the bond's new yield?(A) 25 percent.(В) 2.5 рercent.(C) 2 percent.(D) 20 рercent. 8. Consider a fractional-reserve banking system in which an initial deposit of $1,000 cangenerate up to $1,000,000 in money. What is the reserve ratio?(A) 10 percent.(В) 5 percent.(C) 1 percent.(D) 0.1 percent.

Answered: Image /qna-images/answer/0ddbcab1-dcdc-42ef-8520-f46e6f5cc58d.jpg

9. A 10-year bond sells for its face value of $10,000, with an annual coupon of $250. Because of expected economic growth, the inital bondholder sells it for $12,500. What is the bond's new yield? (A) 25 percent. (B) 2.5 percent. (C) 2 percent. (D) 20 percent.

9. A 10-year bond sells for its face value of $10,000, with an annual coupon of $250. Because of expected economic growth, the inital bondholder sells it for $12,500. What is the bond's new yield? (A) 25 percent. (B) 2.5 percent. (C) 2 percent. (D) 20 percent.

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter16: Information, Risk, And Insurance

Section: Chapter Questions

Problem 8RQ: What are some ways that someone looking for a loan might reassure a bank that is faced with...

See similar textbooks

Related questions

Q: Price Quantity Supplied Quantity Demanded $3 30 75 $4 40 70 $5 50 65 $6 60 60 $7 70 55 $8 80 50…

A: The market demand curve shows the negative relationship between price of the commodity and its…

Q: 6. If there is a shortage in the market for loanable funds, what happens? (A) The supply for…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 10. Suppose the consumption function is represented by the equation: C = 500 + 0.6Y Simple…

A: MPC = coefficient of Y = 0.6 Multiplier = 1 / (1 - MPC) = 1 / (1 - 0.6) = 1/0.4 = 2.5

Q: 69. Consider the following consumption function C = 1100 + 0.6Yd What is the simple multiplier? O a.…

A: The formula for the multiplier is as follows : Multiplier = 1 / 1 - MPC

Q: 62. Fatima's disposable income increases by $1000, and she spends $600 of it. Fatima's a. Fatima's…

A: Macroeconomics is the study of the economy as a whole. It explains different aspects such as income,…

Q: 34 64. If the marginal propensity to save (MPS) is small, O a. make the simple multiplier larger. O…

A: Multiplier =1/1-MPC or 1/MPS

Q: Year Real GDP Nominal GDP Price Index 2000 $14,500 A 100 2001 $15,500 $17,000 B 2002 $20,000 117…

A: Nominal GDP is defined as the total amount of finished goods and services produced within the…

Q: Price Тах Po Quantity 18. Refer to the above figure. What are the prices for buyers and sellers…

Q: Which one is not issued in Macroeconomics

A: CONSUMER'S EQUILIBRIUM isn't included within the macro economics. it's a micro economic property…

Q: Consider the following Macro model: GDP=Y=C+GI+GP+NX C=120+0.80Y. G.I=80 G.P=60 Tax=100 NX= -20 Yd =…

A: Multiplier in economics is the factor by which the economic variables get multiplied due to a change…

Q: 5. Suppose that Inflation and Unemployment interaction is modeled by p=a-T-BU + gn dл dt du dt -=j…

A: Given: p = a − T − ßU + gπ dπ/dt = j(p − π) dU/dt = −k(m − p) g = 1, j = 1, ß = 1, k = 5, m = 1

Q: 75. 17) If the demand and supply equations = Qd = 100 – 4 P Qs = 60 +6 P What is the equilibrium…

A: The point where the demand and supply curve intersects is called the equilibrium point. The…

Q: 14. What happens when aggregate demand increases beyor (A) Prices and output rise. (B) Prices rise…

A: What happens when aggregate demand increases beyond the natural rate of output.

Q: 26. Which of the following is NOT a determinant of demand? (A) The price of a substitute good. (B)…

A: Hi! thanks for the question but according to the guidelines, we answer only one question at one…

Q: Consider a closed economy in which I = $20,000, 000, 000, G = $45, 000, 000, 000, Y = $100, 000,…

A: (1) In closed economy, Y = C + I + G => Y = C + I + G => $100,000,000,000 = C +…

Q: Quantity demanded (income = $10,000) Quantity demanded (income = $12,000) Price $8 40 50 10 32 45 12…

Q: Table 2 showing Current and Constant Price Data and Volume and Price Indices for the period…

A: The nominal GDP is the total value of all the goods and services produced in the economy at the…

Q: 1. Assume the following smooth production function: Q = Q(K,L) with positive marginal…

A: A production function is a numerical function that shows the connection between the inputs utilized…

Q: Description The firm's demand is as follows: Price $18 16 15 14 13 12 10 Quantity 2 3 4 5 6 78 Total…

A: Marginal revenue represents the additional income a company generates by selling one more unit of…

Q: 87. Demand - Pull inflation is caused by O a. a decrease in aggregate demand O b. an Increase in…

A: Demand-pull inflation is a period of inflation which arises from rapid growth in aggregate demand.…

Q: Graph the Federal Funds market before and after the Federal Reserve's response to the crisis. Note…

A: Given that, Fund Rate = 1% Discount rate = 2% Interest on reserves = 0.5%

Q: 41. Year CPI Inflation rate 2004 100 2005 125 A 2006 175 B What is the inflation rate for year 2005…

A: 41) Inflation rate is given as Inflation= [(CPI2005-CPI2004)/CPI2004]*100

Q: 9. Which of the following statements best expresses the Popperian definition of science? (A) We…

A: Note:- Since we can only answer one question at a time, we'll answer the first one. Please repost…

Q: The short-run cost function of a company is given by the equation TC = 200 + 55q, where TC is the…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

A: Economics is a social science that discusses human behavior regarding their unlimited wants in terms…

Q: Assume that output began at its natural level. By using AD-AS (upward sloping) and Phillips curves,…

A: Phillips curve is a curve that shows that the inflation rate and unemployment rate are inversely…

Q: 50. As disposable income increases, O a. consumption and saving both decrease O b. consumption…

A: 50) Disposable income is the sum of consumption and savings.

Q: 4. We can express capital stock as a function of time: K(t). a. Express K (t) as the integral of the…

Q: 1. The Following data is given for the period 1999-2003 Interest rate Inflation i TT 1999 4.7 4.4…

A: A multiple regression equation describes the combined effect of all the predictors in the model.…

Q: The next four questions involve the following situation: Consider an economy with only two products:…

A: Here, price and output of two years, 2020 and 2021, is given where 2020 is base year.

Q: What does it mean to think like an economist?

A: Economist think by considering relevant facts about an economy.Different factors such as…

Q: 28 83. Suppose the aggregate demand and aggregate supply schedules for a hypothetical economy are as…

A: Equilibrium price level is $200.

Q: 10.Consider a price-taking firm that has total fixed cost of $50 and faces a market- determined…

A: Marginal product can be understood as the change in total output by employing one additional labor…

Q: Year CPI 2006 100 2007 136 the rate of inflation for 2007 is O a. 36% O b. 6.3% O c. 3.6% O d. 63%

A: The rate of inflation is a measure of the change in the price level of a country over a given period…

Q: King Hardware sold 7 pounds of bolts yesterday at a price of $5.00 per pound. This point is…

A: Total revenue is the receipt from selling the product. It is calculated by multiplying the price by…

Q: Actual inflation rate Unemployment rate inflation rate Natural Rate of Unemployment Price Level PL3…

A: 1. Drawing the short-run and long-run Phillips curve:The Phillips curve illustrates the relationship…

Q: 7. A Toronto gun shop purchases a set of new Henry and Winchester rifles from the United States for…

A: 7. Consumption is one of the most significant ideas in economics since it helps to define the…

Question

Need help with multiple choice macroeconomic question

9. A 10-year bond sells for its face value of $10,000, with an annual coupon of $250.
Because of expected economic growth, the inital bondholder sells it for $12,500. What
is the bond's new yield?
(A) 25 percent.
(В) 2.5 рercent.
(C) 2 percent.
(D) 20 рercent.

8. Consider a fractional-reserve banking system in which an initial deposit of $1,000 can
generate up to $1,000,000 in money. What is the reserve ratio?
(A) 10 percent.
(В) 5 percent.
(C) 1 percent.
(D) 0.1 percent.

Branch of economics that analyzes the behavior and performance of an economy as a whole. It focuses on the study of aggregates and evaluates changes related to unemployment, gross domestic product, inflation, monetary and fiscal policies of the government.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Benefits in percentage and absolute terms

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Assume that Atlantic National Bank has demand deposits of $100,000 and no excess reserves, and that the reserve requirement is 10 percent. A customer withdraws $5,000 from the bank. To meet the reserve requirement, the bank must increase its reserves by (A) $500 (B) $1,000 (C) $2,000 (D) $4,000 E $4,500
5
(b) Mahsuri Bank which is one of the local banks in your community has the following balance sheet (in billions of RM) as follows: Liabilities 3,000 Deposits 1,350 Assets RM billions RM billions Reserves 5,000 Government securities Loans 650 i. If the required reserve ratio is 0.25 or 25 percent, how much in excess reserves does the bank hold? ii. Determine the maximum amount by which the bank can expand its loan? If the bank makes the loans in (ii), show the immediate impact on the bank's balance sheet. ii.
1. Which of the following is an example of money as a unit of account? (A) A monthly credit card statement (B) A money market account (C) A checking account (D) Pricing of items in a grocery store (E) Direct deposit fint money?
2-A bank has deposits of $ 6 000 000 , its total actual reserves are $1 200 000 and the legal reserve ratio is 0.12 . (a) What is the amount of reserves ? (b) What is the amount of excess reserves ? (c) If the reserve ratio changes to 0.10 what would be the effect on reserves and total actual reserves ,amount of excess reserves remaining the same ?
10 Based on the Required Reserves the Reserve Ratio must be ASSETS LIABILITIES Required Reserves $190 Checking Deposits $1,900 Excess Reserves $ 810 Loans $ 900 Total Assets $1,900 Total Liabilities $1,900 5% 10% 20% 19% O None of the above
If a bank has total deposits of $7,200 and reserves of $1,600: Instructions: Round to the nearest whole number. (a) What is its current reserve ratio? % (b) How large is its loan portfolio (outstanding loans)? %
18) A single commercial bank must meet a 25% reserve requirement. If it initially has reserves and then $2,000 in cash is deposited in the bank, it can increase its loans by a maximum of no excess A) $2,000. B) $1,500. C) S1,250. D) S1,750.
The central bank buys worth of bonds in the open market from Joe, who deposits the proceedsin his checking account at Bank. The required reserve ratio is .(a) What is the amount by which Bank’s liabilities have changed? Explain.(b) Calculate the change in required reserves for Bank. Show your work.(c) What is the dollar value of the maximum amount of new loans Bank can initially make as aresult of Joe’s deposit? Explain.(d) Based on the central bank’s open-market purchase of bonds, calculate the maximum amount bywhich the money supply can change throughout the banking system. Show your work.(e) How will the change in the money supply in part (d) affect aggregate demand and the price level inthe short run? Explain
08
11. Currently, deposits are insured by the FDIC up to ___________ per depositor per bank. Question 11 options: a) $1,000,000. b) $250,000. c) $10,000. d) $100,000.
7