Relationship between the interest rate and the bond price, Macroeconomics

Assignment Help:

Relationship between the interest rate and the bond price

Note that the higher the issue price, the lower the interest rate. In the same way, when the price of a government bond increases, the interest rate falls and vice versa. The price of a government bond is normally determined by supply and demand which means that you can understand movements in these interest rates by analyzing the market. For example, if the government needs to borrow more money, supply increases, bond prices fall and interest rates increase.

 


Related Discussions:- Relationship between the interest rate and the bond price

Major economic indicators, Discuss the three major economic indicators and ...

Discuss the three major economic indicators and how they are indicative of our current economic climate.

Groth model, what role does interst rate play in refernce to output?

what role does interst rate play in refernce to output?

Impact of property crime to increase, Which of the following will cause pro...

Which of the following will cause property crime to increase? a) An increase in jail terms. b) A decrease in personal incomes. c) An increase in the probability of arrest.

MEC and MEI, MEC and MEI curvs and their role in economics

MEC and MEI curvs and their role in economics

Determination of all the endogenous variables, Q. Determination of all the ...

Q. Determination of all the endogenous variables? Determination of all the endogenous variables in the AS-AD model Determination of P and Y: Prices and

Walmart''s strategy of an elements, Elements of Walmart's strategy have evo...

Elements of Walmart's strategy have evolved in meaningful ways since the company's founding in 1962. Prepare a one page report that discusses how its strategy has evolved after rev

What is globalization, what are its effects on the Indian economy? Ans) ...

what are its effects on the Indian economy? Ans) It is largely positive. Globalization has brought a lot of jobs and large sums of investment to India. India's economy has been

Determine the current in the neutral conductor, A 415V, 3-phase, 4 wires, s...

A 415V, 3-phase, 4 wires, star-connected system supplies three resistive loads as shown in Figure. Determine (a) The current in each line and (b) The current in the neutr

How do reductions in government spending affect the economy, Usually the go...

Usually the government is very good at wasting money and resources so less spending, by the government helps the economy as those resources are allocated in areas that are more wel

MR, Question 1: Consider a two-period, two-person pure exchange economy. Ut...

Question 1: Consider a two-period, two-person pure exchange economy. Utility functions and endowments are given as follows. u1(x0; x1) = (x0x1)2 and e1 = (18; 4) u2(x0; x1) = ln x0

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd