A bond pays a coupon rate of 7% and its present market price is $1,000 with exactly one year to maturity.What is the face value of the bond if the market interest rate is 7%?
Explain why Keynesians believe that changes in the money supply have only a small impact on real GDP.
Given the information in the following table for the economy of Shell Island
a)Complete the table.
b)If money supply is equal to $250,what must the equilibrium interest rate be?
c)If the rate of interest is 8% and the money supply is $260,what are the implications?
Suppose the following:
Which bond will offer a higher rate of return?