Reference no: EM131498949

Assignment: The Real Economy in the Long Run

Need to answer each question with knowledge - atleast 150+ words count. No APA format needed as all answer will be copied and postal into a portal.

1. Consider how to explain how higher saving leads to a higher standard of living. What might deter a policymaker from trying to raise the rate of saving?

2. The economy is moving into a period with higher nominal interest rates. How is this likely to affect bond prices? Based on this, is having an undiversified portfolio 100% in bonds a wise move?

3. Consider why it's important for people who own stocks and bonds to diversify their holdings. What type of financial institution makes diversification easier?

4. Consider a change in the tax code that might increase private saving. If this policy were implemented, how would it affect the market for loanable funds?

5. Consider what benefit people get from the market for insurance. What two problems impede the insurance market from working perfectly?

6. Consider what factors a stock analyst should think about in determining the value of a share of stock.

7. Consider how to describe the efficient markets hypothesis with evidence.