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Question 1 1. Financial institutions in the U.S. economy Suppose Osvaldo decides to use $5,500 currently held as savings to make a financial investment. One
Question 1
1. Financial institutions in the U.S. economy Suppose Osvaldo decides to use $5,500 currently held as savings to make a financial investment. One method of making a financial investment is the purchase of stock or bonds from a private company. Suppose Bayzer, a pharmaceutical firm, is selling bonds to raise money for a new lab. This practice is called finance. Buying a bond issued by Bayzer would give Osvaldo the firm. In the event that Bayzer runs into financial difficulty, will be paid first. Suppose instead Osvaldo chooses to buy 250 shares of Bayzer stock. Which of the following statements are correct? Check all that apply. Expectations of a recession that will reduce economywide corporate profits will likely cause the value of Osvaldo's shares to decline. The Dow Jones Industrial Average is an example of a stock exchange where he can purchase Bayzer stock. O The price of his shares will rise if Bayzer issues additional shares of stock. Alternatively, Osvaldo could undertake their financial investment by purchasing bonds issued by the U.S. government. Assuming that everything else is equal, a corporate bond issued by an electronics manufacturer most likely pays a V interest rate than a municipal bond issued by a state. Grade It Now Save & Continue2. Saving and investment in the national income accounts The following table contains data for a hypothetical closed economy that uses the dollar as its currency. Suppose GDP in this country is $470 million. Enter the amount for government purchases. Value National Income Account (Millions of dollars) Government Purchases (G) Taxes minus Transfer Payments (T) 90 Consumption (C) 250 Investment (1) 120Complete the following table by using national income accounting identities to calculate national saving. In your calculations, use data from the preceding table. National Saving (S) million Complete the following table by using national income accounting identities to calculate private and public saving. In your calculations, use data from the initial table. Private Saving = million Public Saving million Based on your calculations, the government is running a budget Grade It Now Save & Continue ntinue without savingStep by Step Solution
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