What is the price of a perpetuity that provides annual coupon payments of $300 if the yield to maturity is 6%?
Suppose that you pay $800 for a one-year discount bond with a face value of $1000. What is the yield to maturity?
Using graphs for both the bond market and loanable funds market, show the effects of an increase in the government budget deficit. Explain the changes in the price of bonds, quantity of bonds, quantity of loanable funds, and interest rates.
Using the Keynesian liquidity preference model, show the effects of an increase in money demand. Explain.