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1. A government bond with face value $20,000 matures next year. This means that next year the government will send the bond holder a $20,000
1. A government bond with face value $20,000 matures next year. This means that next year the government will send the bond holder a $20,000 cheque (the bond is not worth anything afterwards). If the interest rate is 4.5%, what is the bond's market price today? Explain. (3) 2. Here's how much a firm produces for every level of employment, from 1 worker to 10 : Bread is sold for $2 per loaf, and the wage the firm must pay its workers is $17 per hour. How many workers will the firm employ? Give the number and explain. (3) 3. Canada takes in about 400,000 new immigrants every year. What is the effect of immigration on the wages in Canada? Show the changes in the Canadian labour market graphically and explain in words. (4)
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