Answer:
The value of the x-intercept of the budget line is 25.
Explanation:
Based on the question, the budget line equation is as follows:
X5 + Y7.5 = 125 ......................... (1)
Where;
X = Unit of commodity X or value of the x-intercept of the budget line
Y = Unit of commodity Y or value of the y-intercept of the budget line
To calculate value of the x-intercept of the budget line, we assume that Y = 0. Substituting Y = 0 into equation (1) and solve for X, we have:
X5 + (0 * 7.5) = 125
X5 = 125
X = 125 / 5
X = 25
Therefore, the value of the x-intercept of the budget line is 25.
Answer:
A)If interest rates decline, the prices of both bonds will increase, but the 15-year bond would have a larger percentage increase in price.
TRUE
As it has more time to maturity it will have a higher time expose to the rate therefore, will be more volatile against the rate fluctuations
Explanation:
The 10-year ond is issued at premium, above par as the coupon rate 12% is higher than market rate 10%. Each year will decrease the market value to come closer to maturity date.
The 15-year ond is issued at discount, below par as the coupon rate 8% is lower than market rate 10%. Each year will increase the market value to come closer to maturity date.
C. Dividends.
A dividend is the money a company regularly pays its shareholders
Answer: Trade Deficit ($10 Billion).
Explanation:
C=40+0.8Y
Ig=$40 billion
X=$20 billion
M=$30 billion
where,
Y - GDP
C - Consumption
Ig - Gross investment
X - Exports
M - Imports
Balance of trade or Trade balance = Exports - Imports
Since, Imports are greater than the exports, so the nation is experiencing a trade deficit.
Trade deficit = Imports - Exports
= $30 - $20
= $10 billion
