In the Open-Economy Macroeconomic Model, How Can the Market for Loanable

question 82

Multiple Choice

In the open-economy macroeconomic model, how can the market for loanable funds identity be written?

• A) S = I
• B) S = NCO - I
• C) S = I + NCO
• D) S + I = NCO

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Definitions:

Par Value

The face value of a bond or stock, which is the amount paid back to the holder at maturity for bonds, or a base value for calculating dividend payments for stocks.

Coupon Bond

A debt security that pays the holder a fixed interest rate, or coupon, periodically until the maturity date, when the principal is repaid.

Tax Bracket

A tax bracket is a range of incomes taxed at a specific rate under a progressive tax system, where tax rates increase as income increases.

Holding-Period Return

The total return received from holding an asset or portfolio over a period, including interest, dividends, and capital gains.