How would you expect this announcement to affect the value

Reference no: EM13253364

Three months ago you purchased, at par, a $100,000 bond with a stated interest rate of 5%. Today, the Federal Reserve announced that it is reducing the discount rate by 0.5%. How would you expect this announcement to affect the value of your bond? Explain your response.

All other factors held constant, what would be the effect on the demand for money (M1) of each of the following situations. Explain the rationale behind your responses.

An increase in real GDP
An increase in general price levels
A rise in the interest rate on savings accounts and Treasury securities
A doubling of all prices, wages, and incomes

Reference no: EM13253364

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