Suppose that federal government is running a budget surplus

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1. Aspen Co. issues 10-year, zero coupon bonds that yield 5 percent. What is the implicit interest income for the first year for these bonds if the face value is $1,000?

$30.70   

$23.26

$15.28

$46.14

2. Suppose that the Federal government is running a budget surplus. What would be its impact on the nominal interest rates in the economy?

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