Imagine a New Communication Technology Is Invented That Makes It

question 41

Essay

Imagine a new communication technology is invented that makes it easier for foreign investors to buy U.S.Treasury securities.
a.How would you draw the market for Treasury securities showing how the technology,holding all else constant,will affect demand?
b.What will happen to Treasury security prices?

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Definitions:

Semi-Annually

Occurring twice a year, typically every six months, often used in the context of payments, interest calculations, or reporting periods.

Compounded Quarterly

An interest calculation method where interest is added to the principal sum of a deposit or loan every quarter, so that each subsequent interest calculation is made on the principal plus previously added interest.

Compounded Quarterly

The process where interest is calculated and added to the principal balance every quarter, allowing the interest to earn interest in subsequent periods.