ECONOMICS
FISCAL POLICY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Loan money to the government
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Borrow money from a savings and loan
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Donate money for special government projects
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Pay for your child’s education.
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Detailed explanation-1: -When you buy a government bond, you lend the government an agreed amount of money for an agreed period of time. In return, the government will pay you back a set level of interest at regular periods, known as the coupon. This makes bonds a fixed-income asset.
Detailed explanation-2: -When you buy a U.S. savings bond, you lend money to the U.S. government. In turn, the government agrees to pay that much money back later-plus additional money (interest).
Detailed explanation-3: -Bonds are issued by governments and corporations when they want to raise money. By buying a bond, you’re giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year.
Detailed explanation-4: -A bond is a loan to a company or government. It pays investors a fixed rate of return.
Detailed explanation-5: -The India 10Y Government Bond has a 7.418% yield. 10 Years vs 2 Years bond spread is 10.8 bp. Yield Curve is flat in Long-Term vs Short-Term Maturities. Central Bank Rate is 6.50% (last modification in February 2023).