Money Supply

Questions and Problems

Questions marked with an asterisk are answered at the end of the book in an appendix, Answers to Selected Questions and Problems. 1. Would a dollar tomorrow be worth more to you today when the interest rate is 20 or when it is 10 2. You have just won 20 million in the state lottery, which promises to pay you 1 million tax free every year for the next 20 years. Have you really won 20 million 3. If the interest rate is 10 , what is the present value of a security that pays you 1,100 next year,...