$1,000 $980 $960 $940 $920 $900 $880 $860 $840 $820 D CR00 Bond Price

ECON MACRO
5th Edition
ISBN:9781337000529
Author:William A. McEachern
Publisher:William A. McEachern
Chapter12: Federal Budgets And Public Policy
Section: Chapter Questions
Problem 4.9P
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Question 23
$1,000
$980
$960
$940
$920
$900
$880
$860
$840
$820
$800
$780
$760
$740
$720
$700
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$million
The graph above shows the market for a one-year discount bond with a face value of $1,000. The
government's budget deficit increases by $150 million and to finance that deficit it borrows in this
market. This will result in the interest rate to change to:
Choose the number closest to the answer.
O 19.05 percent
O 16.28 percent
O 13.64 percent
O 8.70 percent
Bond Price
Transcribed Image Text:Question 23 $1,000 $980 $960 $940 $920 $900 $880 $860 $840 $820 $800 $780 $760 $740 $720 $700 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $million The graph above shows the market for a one-year discount bond with a face value of $1,000. The government's budget deficit increases by $150 million and to finance that deficit it borrows in this market. This will result in the interest rate to change to: Choose the number closest to the answer. O 19.05 percent O 16.28 percent O 13.64 percent O 8.70 percent Bond Price
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