Why interest rates differ at any given time a range of interest rates prevails in the economy. what four factors contribute to differences in interest rates across consumers?

Q: rates affect business? Consumers?

A: Market interest rate plays extremely essential part in the business and customer spending in light…

Q: Use the following graph to show the effects on the Market for Loanable Funds of many people deciding…

A: Savings is the source of supply of loanable funds. Higher the savings, higher is the supply of…

Q: If government spending were increased, what would occur to interest rates

A: Government spending refers to the money spent by the government on things like health care,…

Q: Imagine that someone offers you $100 today or $200 in 10 years. You would prefer to take the $100…

A: The formula is given by- F = P *(1+i)^t

Q: Which of the following changes would increase the present value of a future payment?     an…

A: Present value- It is the value of a sum of money in the present time. Future payment- The sum of…

Q: Describe how interest could be  good or bad, depending on the situation, and explain why interest…

A: If properly managed, a LOW INTEREST RATE can be beneficial. Low interest rates reduce demand for the…

Q: When interest rates decrease, how might businesses andconsumers change their economic behavior?

A: The interest rate is the rate charged by the lender on the asset lend by them. The asset lend can be…

Q: what happens when interest rate rises?

A: In an economy interest rate plays an important role to determine economic growth and inflation rate.…

Q: If the government wants to increase the amount of savings in the economy, how should it alter…

A:

Q: Suppose a bond with no expiration date has a face value of $10,000 and annually pays a fixed amount…

A: 1) Face value = $10,000 Fixed interest= $750. Interest rate= Fixed interest amount *100/ Face value

Q: What advantage do you have if you begin investing for retirement at a young age? There is no…

A: The various entities in the economy earn income through different ways, and avenues, and they have…

Q: 1. When interest rate i increases, equilibrium output Y will _____. A. Increase B. Decrease C.…

A: Whenever interest rates are raised, investment will be discouraged due to the greater opportunity…

Q: Evaluate (discussing positives and negatives of) the effect of interest rates on consumer choices.

A: Interest rate: - it is the percentage charge on the principal amount by a lender to a borrower.

Q: complete this sentence: High interest rates might might purchasing a house, but at the same time…

A: High interest effects both the borrower and lender in the different manner As interest rate…

Q: In the financial market, if the quantity of funds demanded is greater than the quantity of funds…

A: When the demand for funds increases and the supply of funds is not full fill that demand the…

Q: If you hold a bond at a time when the market interest rate is increasing, you will find that the…

A: Interest Rate Risk: The phenomenon of an inverse relationship between market interest rates and bond…

Q: a) When the demand of output decides how much to produce which type of demand prevails in the…

A: Ans. 4(a) Demand is defined as an economic principle that explains a consumer's desire to buy or…

Q: Assume that a bond was bought for $500 and is now sold for $450.  The interest (yield) on that bond…

A: There is an inverse relationship between interest rate and bond prices. This is because when the…

Q: What refers to the interest rate at which the present worth of net cash flow of an investment equals…

A: The rate of return at which the sum of all present values of all the cash flows becomes zero is…

Q: What might cause interest rates to be low one year and high the next?

A: Interest rates are best thought of as the "cost of money." If a borrower wishes to spend more money…

Q: How can market forces of supply and demand affect interest rates and the economy

A: The demand and supply affect interest rates in the money market. The money market is the market that…

Q: Distinguish between Market and Inflation-Free Interest Rates?

A: The Market interest Rate, also called the nominal interest rate (i) is the rate which is not…

Q: Indicate whether the given statements is true (T) or false (F): "Interest is money paid for the use…

A: Equity capital or equity are shares which a company issues. They are a unit of ownership of the…

Q: You buy a 10-year bond with a 3% coupon. The market interest rate is 2%. If the market interest rate…

A: Claiming a bond is basically similar to having a surge of future money instalments. Those money…

Q: What is meant by the neutrality of nominal interest rates?

A: In an economy, interest rate refers to the proportion of the actual money that an individual has to…

Q: What causes the yield on a discount bond to exceed the coupon rate on a bond?

A: The markets are the place where the buyers of the goods, services, and products tend to meet and…

Q: If the equilibrium price of bonds increases, what happens to the associated interest rate?

A: In a bond market, the price and interest rate are inversely related.

Q: Suppose you received a US savings bond as a gift, and the bond pays $100 at maturity, which is ten…

A: Bond is a financial instrument that ensures a fixed income to the buyer or the investor.

Q: According to the Housing Affordability Index (HAI) is it a good time to buy a home in New Jersey?…

A: Median Housing Price in NJ (MEDPRICE)= $500,628 Interest Rate (i) 3.5% compounded monthly = 0.035…

Q: Question 31 This person earns $1000 of income today and $2000 income next year. Point C represents…

A: Borrowing allows an individual to consume more they can afford using their current income. However,…

Q: Identify the effect of recession in the economy  on either demand or supply curve and the…

A: What is a recession? Recession is a term utilized to signify a slowdown in general economic…

Q: Refer to Figure 13-1 above. Ceteris paribus, a decrease in interest rates would be represented by a…

A: People are more likely to borrow money to make large purchases, such as houses or vehicles, if the…

Q: A man borrowed P75,000+15 on September 18, 1898, and promised to pay on May 17, 1904, at a simple…

A: Interest refers to the amount paid in excess of the principal amount by the borrower to the lender.…

Q: What are objectives on interest rate spread

A: When talking about interest rate spread, it is considered as the difference in the interest rate…

Q: Raphael observes that at the current level of interest ratesthere is an excess supply of bonds, and…

A: The bonds and shares of a company will be purchased on the basis of the available information such…

Q: What is the relationship between nominal and effective interest rates?

A: The interest rates refer to the rate at which the loans are given by the banks, or other lending…