Exploring Debt

7. The reading gave a breakdown of the U.S. debt by instrument and holder for two years that show a rapid increase in the growth of the debt. What has happened in the years since 1995? See if you can update this table. (One place you will find some of the information is <http://www.publicdebt.treas.gov/bpd/bpdhome.htm>. It shows total debt and the amount help by the public. You can also find some of the data at <http://www.stls.frb.org/fred/index.html>. A good place to start a search for economic data is at Resources for Economists on the Internet, <http://rfe.org/showCat.php?cat_id=2>. Have fun searching!)

8. What has been happening to interest rates? You can get data on interest rates from the web. Many interest rates are reported at <http://www.federalreserve.gov/releases/H15/Current/>, and historical data for many of them is available at <http://www.stls.frb.org/fred/index.html>. Many interest rates are also reported in the many financial sites on the web.

a. What is the current federal-funds rate?
b. Economists and people involved in financial markets pay attention to the yield curve, which graphs interest rates on the vertical axis and time to maturity on the horizontal axis. Plot the current yield curve for Treasury debt. (Hint: you can either get the data from one of the sites given above, or do a search on the internet for "yield curve." You might find it already plotted for you.)

9. Search the web and find where you can trade options and where you can trade futures. Why would people want to use these markets?

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