In an economy where the money supply and aggregate demand have been decreased by the central bank, you know that the central bank is using a contractionary monetary policy.
In an economy, changes in the money supply leads to changes in aggregate demand. An increase in the money supply increases aggregate demand and a decrease in the money supply decreases aggregate demand.
When a central bank takes action in order to decrease the money supply and increase the interest rate, it is following a contractionary monetary policy. Thus, the central bank requires Southern to hold 10% of deposits as reserves.
Hence, the decrease in the money supply reduces income and raises the interest rate.
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There will be less tax revenue and more governmental borrowing
There will be lower spending and lower output since the unemployed are unable to purchase goods.
Overall there will be an inefficient low functioning government
Answer:
at 13% --> $1,000
at 17% -->$806.54
at 10% --> $1,194.85
When the rates do not match people will only accept the bond if their desired market return can be acheive. Because, the coupon payment are fixed the only way to do so is by changing the price ofthe bond.
So bond with coupon rate above market are trade at a price higher than face value while, below market traded at lower price.
Explanation:
The market value of a bond is the present value of the future coupon payment and maturity given the current market rate
When the market rate matches the coupon rate then the bond is at par and sales at face value.
C 130.000
time 11
rate 0.17
PV $628.7337
Maturity 1,000.00
time 11.00
rate 0.17
PV 177.81
PV c $628.7337
PV m $177.8097
Total $806.5435
C 130.000
time 11
rate 0.1
PV $844.3579
Maturity 1,000.00
time 11.00
rate 0.1
PV 350.49
PV c $844.3579
PV m $350.4939
Total $1,194.8518
Answer:
T-REx
Explanation:
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Intellectual Property.
Examples are copyrights, trademarks, and patents.
It is "intangible" because the intellectual property claim is on the idea and process, and is embodied in physical form because it is used to create products. So you can patent the <em>idea </em>for a new creative product and then use those patent protections to build and profit off of making the item.