Answer:
The correct answer is letter "A": The amount that would be paid today to receive a single amount at a specified date in the future.
Explanation:
The present value (PV) of a single sum tells us how much a future sum of money is worth today given a specified rate of return. This is an important financial concept based on the principle that money received in a specific time in the future is not worth as much as an equal sum received today.
<u>Solution and Explanation:</u>
1. the Yield to maturity
FV = 1,000
PMT = FV multiply with Coupon rate
, PMT = 1,000 multiply with 0.1 = 100
N = 5
, PV = -1,197.93
CPT I/Y
I/Y = 5.380166647
Therefore, the Yield to maturity = 5.380166647%
Where: FV – fair value, PV – Present value
2. Current yield = Coupon payment divided by Price
Current yield = 100 divided by 1,197.93
By solving we get,
Current yield = 0.08347733173
Therefore, the Current yield = 8.347733173%
The correct answer is allocates resources efficiently and allows economic freedom.
The market system of economics is one where economic decisions and the pricing of goods and services are guided solely by supply and demand and there is limited to no government interaction in the economy. Because of this, two major virtues of the market system are that it allocates resources efficiently and allows economic freedom.
Answer:
(a.) The state of Pennsylvania repaves highway PA 320, which goes through the center of Swarthmore. – <em><u>This will fall under the category of Government Spending(G)</u></em>
Reason: In this case the government is utilizing money in order to construct highway that will benefit public.
(b.) Musashi buys a sweater made in Guatemala –<em><u>This will fall under the category of imports(M)</u></em>
Reason: The product/commodity is being produced outside domestic boundaries, hence it is calculated under imports
(c.) Rina gets a new refrigerator made in the United States. - <em><u>This will fall under the category of consumption(C)</u></em>
Reason: Commodities produced within the domestic boundaries and further consumed or bought within domestic boundaries will be calculated under consumption
(d.) Rina's father in Sweden orders a bottle of Vermont maple syrup from the producer's website. - <em><u>This will fall under the category of exports(X)</u></em>
Reason: Here the maple syrup is being delivered to a third party living abroad so it will be calculated under export .
(e.) Musashi's employer upgrades all of its computer systems using U.S.-made parts. - <em><u>This will fall under the category of investment(I)</u></em>
Reason: Money spent to upgrade the system in order to increase productivity and this indeed will have an effect for a long duration. Therefore it'll be seen as an investment.
Answer:
2. False
Explanation:
The market for money is like the market for any other good: if demand is higher than supply, then, the price of money (the interest rate), will have to be lowered, so that money becomes cheaper and more abundant, and supply and demand become equal and reach equilibrium.
In this case, the centrla bank needs to lower the interest rates by buying bonds. When the central bank buys bonds, it prints more money that is put in the market, effectively increasing the supply of money, and lowering the interest rate in the meantime.
