Answer in step by step with explanation.Don't use Ai and chatgpt You would expect a bond of the U.S. government to pay.interest rate as compared to a bond of an Eastern European government.You would expect a bond that repays the principal in year 2040 and a bond that repays the principal in year 2020 to pay different interest ratesbecause of differences in the bonds'You would expect a bond from a software company you run in your garage and a bond from Coca-Cola to pay different interest rates because ofdifferences in the bonds'You would expect a bond issued by New York State to payinterest rate as compared to a bond issued by the federal government.

Bond interest rates are determined by a number of variables, such as the maturity date, perceived…

Answered: You would expect a bond of the U.S.…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter18: Savings,investment And The Financial System

Section: Chapter Questions

Problem 1PA

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Fill in the blank with correct words and explain it in 2-3 sentences each
For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain! a). a bond of the U.S. government or a bond of an East European government b). a bond that repays the principal in year 2015 or a bond that repays the principal in year 2040 c). a bond from Coca-Cola or a bond from a software company you run in your garage d). a bond issued by the federal government or a bond issued by New York State
Suppose that the city of New York issues bonds to raise money to pay for a new tunnel linking New Jersey and Manhattan. An investor named Susan buys one of the bonds on the same day that the city of New York pays a contractor for completing the first stage of construction. Is Susan making an economic or a financial investment? What about the city of New York?
For each of the following pairs, which bond would you expect to pay a higher interest rate? Explain! a bond of the U.S. government or a bond of an East European government a bond that repays the principal in year 2015 or a bond that repays the principal in year 2040 a bond from Coca-Cola or a bond from a software company you run in your garage a bond issued by the federal government or a bond issued by New York State 2. Many workers hold large amounts of stock issued by the firms at which they work. Why do you suppose companies encourage this behavior? Why might a person not want to hold stock in the company where he works? 3. Economists in Funlandia, a closed economy, have collected the following information about the economy for a particular year: Y = 10,000; C = 6,000; T = 1,500; G = 1,700. The economists also estimate that the investment function is: I =3,300 –100r where r is the country’s real interest rate, expressed as a percentage. Calculate private saving, public saving,…
For each of the following pairs, which bond wouldyou expect to pay a higher interest rate? Explain.a. a bond of the U.S. government or a bond of anEastern European governmentb. a bond that repays the principal in year 2020 or abond that repays the principal in year 2040c. a bond from Coca-Cola or a bond from a softwarecompany you run in your garaged. a bond issued by the federal government or abond issued by New York State
If there is a weakening in time preferences among U.S. consumers and foreign entities that channel their wealth to the United States, then we can expect which of the following to increase? Select all that apply. Choose one or more: A. demand for loanable funds B. level of Investment C. supply of loanable funds D. Interest rates
Suppose a bond pays annual interest of $50. Compute the interest rate per year that a bondholder can earn for each face value in the following table. Face Value Interest Rate per Year (Dollars) 200 500 1,000 (Percentage) If the annual interest paid stays the same and the face value of the bond goes up, then the interest rate paid for the bond per year
1. An article in the Economist magazine notes the following about peer-to- peer lending sites: "Instead of a bank intermediating between savers and borrowers, the two parties deal with each other directly" (a) ( What does the article mean when it describes banks as "intermediatin" between savers and borrowers? (b) What advantages and disadvantages might a peer-to-peer lending site have for savers and borrowers when compared with using a bank?
1. How does the U.S. savings rate compare to that of another country? 2. How is the U.S. doing? 3. What does the Bible say about saving and/or investing? According to Prov. 13:22, Prov. 22:7, Rom. 13:8, Matt. 25:14-30, and Luke 19:12-26.
Explain in a few paragraphs why interest rates have recently been increased in Australia? Use economic theory and models.
EXERCISE 10.9 LIMITS ON LENDING Many countries have policies that limit how much interest a moneylender can charge on a loan. Do you think these limits are a good idea? Who benefits from the laws and who loses? What are likely to be the long-term effects of such laws? Tips: For Question 2, you may think about how a low interest rate would affect the poor and those who owe huge debts. For Question 3, you may think about how it would affect the profitability of the banking sector and the supply of lending (will lenders be encouraged to lend more?), and what implications it may have for "credit rationing" (being credit constrained).
What is the financial market, what does it do in terms of saving investment and interest rates

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