Go to the United States Treasury website and find the latest information available on the size of the U.S. national debt. Go towww.treasurydirect.gov. Click on Debt to the Penny. This will bring up the relevant tables. For example, on June 7, 2013, the size of the national debt was $16.74 trillion.

Questions

1. What is the most recent dollar value of the U.S. national debt?

2. Calculate the percentage change in the U.S. national debt since June 7, 2013.

3. Suppose you borrow $15,000 and then repay the loan by making 12 monthly payments of $1,297.92 each. What rate will you be quoted on the loan? What is the effective annual rate you are paying?

4. What is the loanable funds theory of interest rates?

5. What is the difference between the expected real interest rate and the real rate of interest actually earned?

6. Who are the major suppliers and demanders of funds in the United States and what is their typical position?

7. Explain the logic of the liquidity premium theory of the term structure.

8. Explain the market segmentation theory of the term structure.