Exam 8: Interest Rates

When referring to an "upward sloping" yield curve, interest rates:

Speculative inflation is aided by union-corporation contracts.

Holding demand constant, a decrease in the supply of loanable funds will result in an increase in interest rates.

An increase in inflation should:

The basic price that equates the demand for and supply of loanable funds in the financial markets is the __________:

Economists who believe that long-run inflationary bias will continue base their belief on which of the following factors:

The default risk premium is the compensation that investors demand for holding securities that cannot easily be converted to cash without major price discounts.

A decrease in the supply for loanable funds, holding demand constant, will cause interest rates to:

An additional expected return to compensate for interest rate risk on debt instruments with longer maturities.

An economy with a large share of young people will have more total savings than one with more late middle-aged people.

Which of the following factors does not affect the supply of loanable funds?

Treasury notes are intermediate-term Federal debt obligations.

Which of the following is not true of Treasury bonds?

The interest rate on a risk-free debt instrument when no inflation is expected.