Answer:
$605,000
Explanation:
According to the scenario, computation of the given data are as follows,
Face value = $605,000
Coupon rate = 6%
Rate of interest = 6%
As coupon rate and market interest rate is similar, then in this scenario issuance price of the bond is equals to face value of the bond.
Then, Issuance price of bonds = Face value of bonds
Issuance price of bonds = $605,000
Answer:
a. only if people underestimate the inflationary side effects of the policy.
Explanation:
The modern Phillips curve suggests that as inflation increases, unemployment reduces and vice versa dependent on two factors; the level of inflation and the excess of growth rate of wages over the expected inflation. The larger the excess, the greater the effect of the expansionary monetary policy. Thus, if it is underestimated, then the unemployment will greatly reduce.
Answer:
The answer is: B) The railroad felt that the demand for passenger service was inelastic and opponents of the rate increase felt it was elastic.
Explanation:
If the demand for a product or service is price inelastic, then if the price of that product or service increases, the quantity demanded will decrease at an smaller rate (e.g. price increases by 20%, quantity demanded decreases by 10%).
If the demand is price inelastic, the opposite happens. (e.g. if the price of a good increases by 10%, the quantity demanded for the product will decrease by 20%).
When a negative real shock hits the economy, without monetary intervention, both inflation and real growth will decline.
Inflation can be defined as an increase in prices, which can be translated as a decrease in purchasing power over time. The rate of decline in people's purchasing power can be reflected in the increase in the average price of a selected basket of goods and services over a period of time. An increase in price, which is often expressed as a percentage, means that one unit of currency is effectively buying less than it did in the previous period. Inflation can be contrasted with deflation, which occurs when prices fall and people's purchasing power increases.
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