Answer:
Increasing inflation expectations will change the demand curve to the left and the supply curve to the right, resulting in a fall in the price of the equilibrium. therefore new equilibrium occurs at a reduced price
Since Nominal rate of interest = Real interest rate + Inflation rate.
As a result, the rise in expected inflation will boost the nominal rate of interest on both quick-term and lengthy-term bonds.
The longer the bond maturity, the greater the volatility in price. The longer the maturity of the bond, the larger / bigger the price change as a result of market interest rate changes. As a result, long-term capital losses will be more than short-term capital losses.
Answer:
Tragedy of the Commons
Explanation:
The tragedy of the commons refers to a situation where the individual could access to the resources that are shared for their own interest.
So it is the market situation where the participant expolited the resources also there is no limited for accessing the resources
So the above term should be considered for the given situation
Answer:
Monthly payment =$32,618.05
Explanation:
<em>To arrive at the monthly installment, we would calculate the total interest due on the loan for nine months, add it to the principal and then divided the sum by 9 months</em>
<em>The monthly installment</em>
= (Principal + total interest for 9 months)/ number of months
<em>Interest for 9 months </em>
= 9%× 9/12 × 275,000
= $18,562.5
<em>Monthly installment</em>
= (275,000 + $18,562.5)/9
=32,618.05 per month
Answer:
No, the debt is not manageable because interest payments equal $96 million per year.
Explanation:
Annual interest payment for debt = 0.08*1.2B = $96 million
Only the interest payment is about 96% of government revenue, so its not manageable.