Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Microeconomics Expert

Economics


Home >> Microeconomics

1. Consider a risk-free bond paying today's purchasing power of $100 a year from now. This means that the bond will pay tomorrow an amount of money that suffices to buy a bundle of commodities that cost $100 today, so this is a real or inflation indexed bond. Suppose this bond costs $97.73. What is the real interest rate?

2. Suppose there is a second bond, paying two years from now the purchasing power that $100 has today. Suppose this bond costs $95.02 today. On the basis of these figures, is the real interest rate next year lower or higher than this year?

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91590614

Have any Question?


Related Questions in Microeconomics

Question a clothing manufacturer employs casual sales staff

Question: A clothing manufacturer employs casual sales staff on an as-needed basis at the legal minimum hourly wage. At the same time, the owner of the outlet enters into a fixed-term contract with a department store to ...

Question go to the library or the internet and discover

Question: Go to the library or the Internet and discover some other reason for Wal-Mart's success not mentioned in the chapter. How would you test whether or not that reason is actually responsible? The response must be ...

Question new us tax legislation could include a tax credit

Question: New U.S. tax legislation could include a tax credit for the use of alternative energy sources that significantly reduces the cost of using alternative fuels. Explain, in economic terms, how this may impact the ...

Question -1 how does the fda face the problem of scarcity2

Question - 1. How does the FDA face the problem of scarcity? 2. Do you think that the FDA is making good choices in the face of scarcity? 3. Explain the trade-off that the FDA faces.

Question three firms are considering entering a new market

Question: Three firms are considering entering a new market. The payoff for each firm that enters is 150/n, where n is the number of firms that enter. The cost of entering is 62. Find all the pure-strategy Nash equilibri ...

Question consider a firm that makes plastic cups it

Question: Consider a firm that makes plastic cups. It produces the cups using two inputs: metal molds and plastic pellets that are melted and injected into the molds. The firm only needs one metal mold to produce any num ...

Explain briefly but clearly the concepts of scarcity and

Explain briefly but clearly the concepts of scarcity and opportunity cost. Provide an example of opportunity cost from either your personal or professional experiences. Remember to include explicit costs (able to be meas ...

Question suppose the government imposes a payroll tax of 1

Question: Suppose the government imposes a payroll tax of $1 per hour of work and collects the tax from employers. Use a graph for the market for labor to show the effect of the payroll tax, assuming the special case of ...

Question - the federal government recently decided to raise

Question - The federal government recently decided to raise the excise tax on hard liquor. a. Graphically illustrate the effects of this tax on the market for hard liquor. b. Would a $1 increase in the excise tax on liqu ...

Question the index of consumer expectations dropped much

Question: The index of consumer expectations dropped much more sharply before the brief and mild 1980 recession than it did before the much more severe and prolonged 1981-2 recession. The same pattern also occurred for t ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As

Follow Us

© Copyright 2013-14 mywordsolution.com All rights reserved