Money for the series b bond as the first bid we all

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money for the series B bond, as the first bid we all have the same amount of $ 50. And while people know that 8 was a trial price, so they tend to think that the price would be higher for the series B bond. So they tend to make a bid higher than $8 in order to make a wise choice. c. If 150 bonds were sold instead in the Series B bond market, what would be
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Econ 350 Winter 2012 Assignment 4 4 the equilibrium (or market-clearing) price? Supply increases, the market clearing price would be $9.00 and more people will have a success bid. 5. For one more review of the credit crisis, go to the following youtube video: http://www.youtube.com/watch?v=bx_LWm6_6tA or go to youtube.com and search for “crisis of credit visualized”. After watching the video, please answer the following questions: a. According to the video, what is the role of financial institutions or “Wall Street”? “Wall Street” is in between the House owners and the investors, they are making profit by acquiring mortgages from the House owners and make them a financial product and sell them to the investors, they gain profit by doing this. b. What problems were created when Alan Greenspan held the Federal Funds rate at 1% in the early 2000s? The problems is that Federal Funds become less popular and investors tend to buy the financial product made by the “Wall street”. So too many demand make the quality decline of the supply, bad loans and predatory lending are mixed up in theses financial products, it make c. What is leverage? How does it increase bank profits? The leverage is the how much money the bank can borrow from its investors. For instance, if the bank has a customer’s deposit of $1000, a leverage of 10 to 1 means that the bank can borrow $ 10000 from its customer and make investment. It increases the profit because the banks have more and more
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