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:

Public Good

An item or service made available at no cost to everyone in society, delivered by public institutions, private organizations, or individuals without aiming for financial gain.

Marginal Cost

The cost of producing one additional unit of a good or service, a concept crucial for understanding economic decision-making and pricing strategies.

Positive Externalities

Benefits that result from a commercial activity experienced by others who are not directly involved in the transaction or activity.

Spillover Benefits

The positive effects experienced by third parties or the wider community from an economic transaction or activity, which are not reflected in the market price.