Exam 5: The Behavior of Interest Rates

When the price level falls,the ________ curve for nominal money ________,and interest rates ________,everything else held constant.

The demand for silver decreases,other things equal,when

An increase in the interest rate

The demand curve for bonds has the usual downward slope,indicating that at ________ prices of the bond,everything else equal,the ________ is higher.

When the expected inflation rate increases,the demand for bonds ________,the supply of bonds ________,and the interest rate ________,everything else held constant.

In the loanable funds framework,the ________ is measured on the vertical axis.

Higher government deficits ________ the supply of bonds and shift the supply curve to the ________,everything else held constant.

In Keynes's liquidity preference framework,individuals are assumed to hold their wealth in two forms:

-In the figure above,one factor not responsible for the decline in the demand for money is

If the price of bonds is set ________ the equilibrium price,the quantity of bonds demanded exceeds the quantity of bonds supplied,a condition called excess ________.

Everything else held constant,when the inflation rate is expected to rise,interest rates will ________; this result has been termed the ________.

In the liquidity preference framework,a one-time increase in the money supply results in a price level effect.The maximum impact of the price level effect on interest rates occurs

-In the figure above,the price of bonds would fall from P₂ to P₁ if

Everything else held constant,would an increase in volatility of stock prices have any impact on the demand for rare coins? Why or why not?

When the price level ________,the demand curve for money shifts to the ________ and the interest rate ________,everything else held constant.

The demand for houses decreases,all else equal,when

The bond demand curve is ________ sloping,indicating a(n)________ relationship between the price and quantity demanded of bonds.

When the interest rate on a bond is ________ the equilibrium interest rate,in the bond market there is excess ________ and the interest rate will ________.

Both the CAPM and APT suggest that an asset should be priced so that it has a higher expected return

-In the figure above,illustrates the effect of an increased rate of money supply growth at time period 0.From the figure,one can conclude that the