Questions Uploads

Hello, Please explain. Let’s denote the price of a nonmaturing bond(called aconsol) as Pb.

/in /by

Hello, Please explain.

Let’s denote the price of a nonmaturing bond​(called a​ consol) as Pb.  The equation that indicates this price is Pb=I/r​, where I is the annual net income the bond generates and r is the nominal market interest rate. 

a. Suppose that a bond promises the holder ​$500 per year forever. The nominal market interest rate is 4 percent.

 Calculate the​ bond’s current​ price: ​$.

​(Round your answer to the nearest whole​ dollar.)

Thank you!

 
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"

Suppose that initially the money supply is $4.0 trillion, the price level equals 4.00, the real GDP is $6.0 trillion inbase-year dollars and income…

/in /by

Hello, please explain.

Suppose that initially the money supply is ​$4.0 ​trillion, the price level equals 4.00​, the real GDP is ​$6.0 trillion in​ base-year dollars and income velocity of money is 6. Then suppose that the Fed cuts the money supply in half but the income velocity of money doubles.

Calculate the price level after all these changes have taken place.

Thank you!

 
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"

Suppose that initially the money supply is $1 trillion, the price level equals 3, the real GDP is $5 trillion inbase-year dollars, and income.

/in /by

Hello, please explain.

Suppose that initially the money supply is ​$1 ​trillion, the price level equals 3​, the real GDP is ​$5 trillion in​ base-year dollars, and income velocity of money is 15. Then the money supply increases by ​$100 ​billion, while real GDP and income velocity of money remain unchanged.

a.    According to the quantity theory of money and prices, calculate the new price level after the increase in money​ supply:

Thank you!

 
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"

finance its credit​ policy

/in /by

Suppose that to finance its credit​ policy, the Fed pays an annual interest rate of 0.25 percent on bank reserves. During the course of the current​ year, banks hold ​$1.4 trillion in reserves.

What is the total amount of interest the Fed pays banks during the​ year? The Fed pays banks ​$___________ billion of interest during the year.

 
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"