Suppose the market for loanable funds is currently in equilibrium. Which of the following factors will cause an increase in the interest rate? Select one: O a. An increase in the household saving rate O b. An expansionary monetary policy O c. An increase in business confidence Od. A decrease in government budget deficits Travis buys a 20-year, $10,000 US Treasury bond with a coupon rate of 5%. After three years, he has some unexpected expenses and decides to sell the bond. In which market will Travis sell his bond? Select one: O a. The secondary bond market Ob. The primary bond market Oc. The Treasury bond market Od. The T-bond market

Suppose the market for loanable funds is currently in equilibrium. Which of the following factors will cause an increase in the interest rate? Select one: O a. An increase in the household saving rate O b. An expansionary monetary policy O c. An increase in business confidence Od. A decrease in government budget deficits Travis buys a 20-year, $10,000 US Treasury bond with a coupon rate of 5%. After three years, he has some unexpected expenses and decides to sell the bond. In which market will Travis sell his bond? Select one: O a. The secondary bond market Ob. The primary bond market Oc. The Treasury bond market Od. The T-bond market

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

Suppose you received a US savings bond as a gift, and the bond pays $100 at maturity, which is ten years from now. What happens to the present value of this bond payment if the interest rate increases? A. Present value increases B. Present value is not affected C. Present value declines
10. What is the present value of a perpetuity of $100 if the appropriate discount rate is 7%? If interest rates in general were to double and the appropriate discount rate rose to 14%, what would happen to the present value of the perpetuity?
1. Assuming that the current interest rate is 3 percent, compute the present value (or price) of a five-year, 5 percent coupon bond with a face value of $1,000. What happens to the present value when the interest rate goes to 4 percent? Compute the new present value.
Suppose that the demand for laonable funds for car in the Milwaukee area is $11million per month at an interest rate of 10 percent per year, $12million at an interest rate of 9 percent per year, $13million at an interest rate of 8 percent per year and so on. a. If the supply of loanable funds is fixed at $17million, what will be the equilibrium interest rate? b. If the government imposes a usury law and says that car loans cannot exceed 3 percent per year, how big will the monthly shortage (or excess demand) for car loans be? c. How big will the monthly shortage for car loans be if the usury limit is raised to 7 percent per year?
4.5
If the interest rates increase this will _____ the quantity of loanable funds demanded, and if the interest rates decrease this will______it. Select one: a. increase; reduce b. increase; increase c. reduce; increase Od. reduce; reduce