Suppose a coupon bond with a par value of $1000 is currently priced at $950 and has a coupon of $40. Which of the following is true?
A) current yield > coupon rate
B) current yield < coupon rate
C) coupon rate has risen
D) coupon rate has declined
A
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In 2008, expected inflation exceeded inflation. In 2009, inflation exceeded expected inflation
Therefore the real interest rate was ________ than the expected real interest rate in 2008 and the real interest rate was ________ than the expected real interest rate in 2009. A) less; less B) less; greater C) greater; less D) greater; greater
A bank currently has checkable deposits of $100,000, reserves of $30,000, and loans of $70,000 . If the required reserve ratio is lowered from 20 percent to 15 percent, this bank can increase its loans by:
a. $15,000. b. $10,000. c. $75,000. d. $ 0. e. $5,000.
The public debt is the:
A. accumulation of federal budget surpluses and deficits over time. B. difference between federal assets and liabilities over time. C. accumulation of payments for goods and services purchased by the federal government over time. D. difference between current tax revenues and government expenditures.
In most cases, expenditure-switching policies must be accompanied by expenditure-reducing policies because
A) expenditure-switching policies are completely ineffective without expenditure-reducing policies. B) inflation ensues as home country domestic expenditures switch away from foreign goods to domestic goods unless overall expenditures are reduced. C) inflation abroad may increase the demand for domestic goods, causing inflation to rise. D) the depreciation in the exchange rate may decrease the domestic price of foreign goods, causing an increase in the current account deficit.