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Free_Kalibri [48]
3 years ago
12

Fill in the blanks below. Possible options are given in the parentheses after each blank. If American households and firms expec

t that the economic conditions in the US will become worse in the near future, there will be a real impact on the US economy, in particular on the price level and real output level. However, the Federal Reserve could try to reduce the impact by _______ (buying, selling) bonds. This action will result in a ________ (higher, lower) level of money supply and a ________ (higher, lower) level of interest rate. The effect of this interest rate change is that there will be _______ (more, less) investment and _________ (increased, decreased) real GDP.
Business
1 answer:
Andrews [41]3 years ago
5 0

Answer:

Expectation of worse economic condition means it is experiencing recession which expected to become worse in near future. The Fed tends to increase the money supply to induce investment, which bring increase in demand and lead to an increase in real GDP.

The Federal Reserve could try to reduce the impact by <u>buying</u> bonds. This action will result in a <u>higher</u> level of money supply and a <u>lower</u> level of interest rate. The effect of this interest rate change is that there will be <u>more</u> investment and <u>increased</u> real GDP.

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The Whitesell Athletic Corporation's bonds have a face value of $1,000 and a 10% coupon paid semi-annually. The bonds mature in
aniked [119]

Answer:

Bond Price = $1213.18605 rounded off to $1213.19

Explanation:

To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is a semi annual bond, the coupon payment, number of periods and semi annual YTM will be,

Coupon Payment (C) = 1,000 * 0.10 * 6/12  = $50

Total periods (n) = 10 * 2 = 20  

r or YTM = 0.07 * 6/12 = 0.035

The formula to calculate the price of the bonds today is attached.

Bond Price = 50 * [( 1 - (1+0.035)^-20) / 0.035]  + 1000 / (1+0.035)^20

Bond Price = $1213.18605 rounded off to $1213.19

3 0
3 years ago
Compared to basic savings accounts, CDs are --------- liquid and have ----- interest rates.
Leto [7]

CD stands for Certificate of Deposit.

Compared to basic savings accounts, CDs are less liquid and have higher interest rates.CDs often offer you a higher interest rate upfront, if you’re willing to leave your money alone for a set amount of time

 The term liquidity denotes the degree to which an asset can be bought or sold in the market without affecting the asset's price.

8 0
4 years ago
Read 2 more answers
Wallace Container Company issued $100 par value preferred stock 10 years ago. The stock provided an 8 percent yield at the time
ExtremeBDS [4]

Answer:

Current dividend paid = 8% x $100 = $8

Current yield = <u>Current dividend paid</u>

                         Current market price

Current yield = <u>$8</u>

                         $74

Current yield  = 0.1081 = 10.81%

Explanation:

Current yield is the ratio of current dividend paid to current market price. The current dividend paid is $8 and the current market price is $74. The division of current dividend by current market price gives current yield.

3 0
3 years ago
Corporate social responsibility: Group of answer choices
Misha Larkins [42]

Answer:

Letter e is correct.<em> Extends beyond ethics to include community, environment, and human rights</em>

Explanation:

Corporate social responsibility refers to the voluntary commitment that companies have to make a contribution to the development of the society in which it operates, in addition to reducing its environmental impacts and ensuring the preservation of human rights. This is when the company implements beneficial actions that exceed those required by law.

In a globalized world, there is legal pressure from consumers, institutions, NGOs and the media to make companies not only profitable but also voluntary contributors to building a more egalitarian society.

The benefits added to companies that practice corporate social responsibility are diverse, with emphasis on improving community value and improving stakeholder satisfaction and perception.

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