Calculate the equilibrium interest rate and dollar amount
Point Price of bond Interest rate (i) DemandA $925 (1000 – 925)/ 925 = 8.1% $100 billionB $800 (1000 – 800)/ 800 = 25% $400 billion Table 2: Supply of Bonds Point Price of bond Interest rate (i) DemandA $925 8.1% $400 billionB $800 25 % $100 billion Draw the demand and supply schedules for bonds using: X- axis : $AmountY- axis: Interest rate Calculate […]