Ellucidate what happens to the price of a bond

Reference no: EM1339433

Fiscal Policy

1. List and describe the two types of countercyclical fiscal policy.

2. a. What are the advantages of the Fed increasing interest rates when the GDP gap is positive?
b. What are the disadvantages of the Fed increasing interest rates when it believes the GDP gap is positive?

3. Explain what happens to the price of a bond that pays a fixed percent of the face value every year when interest rates in the economy increase.

4. Suppose that a stock has a price that gives it the same expected rate of return as a bank account. Explain why this is not an equilibrium situation.

Reference no: EM1339433

Questions Cloud

Explain how does this compare to other industrial economies : Explain how does this compare to other industrial economies. What is your opinion on this relationship of the budget deficit to GDP.

Outcome and legacy of civil war : Summarize the contributions of each, North, South, West to the outcome and legacy of the Civil War.

If the acetyl coa is labeled at the methyl carbon : The following experiments are carried out using a pure preparation of enzyme that catalyzes palmitate synthesis from acetyl CoA and malonyl CoA in presence of all the cofactors needed for reaction.If the acetyl CoA is labeled at the methyl carbon.

Explain employment law analysis : Explain Employment Law Analysis and What could the plaintiffs have done differently to have a better chance at getting their class action certified

Ellucidate what happens to the price of a bond : Ellucidate what happens to the price of a bond that pays a fixed percent of the face value every year when interest rates in the economy increase.

Strategies of teaching about civil war : What type of classroom activities could be incorparated and further exemplify the three factors?

Locating hub near map coordinates : Near which map coordinates should the hub be located?

What gland generates cortisol : What gland generates cortisol

Illustrate kinds of development assistance : According to Jeffrey Sachs, Illustrate kinds of development assistance can make a difference in Africa, and what role does he anticipate for the developed world.

User Account

All Pages