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Interest Rate Effect
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Go to table 10-1 which is based on bonds paying 10 % interest for 20 years. Assume interest rates in the market ( yield to maturity) decline from 11 % to 8%: a. what is the bond price at 11% b. what is the bond price at 8% c. what would be your percentage return on investment if you bought when...
Total effect + income effect = Substitution effect?
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In intermediate economics we are told that Total Effect = Income effect + Substitution effect but in advance level this relation is changed to Total effect+income effect = substitution effect why is that? Please explain with logic View more questions Search
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