Exam 5: The Behavior of Interest Rates

If stock prices are expected to climb next year,everything else held constant,the ________ curve for bonds shifts ________ and the interest rate ________.

Everything else held constant,if the expected return on RST stock declines from 12 to 9 percent and the expected return on XYZ stock declines from 8 to 7 percent,then the expected return of holding RST stock ________ relative to XYZ stock and demand for XYZ stock ________.

The riskiness of an asset that is unique to the particular asset is

In the bond market,the market equilibrium shows the market-clearing ________ and market-clearing ________.

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

Of the four effects on interest rates from an increase in the money supply,the one that works in the opposite direction of the other three is the

Use demand and supply analysis to explain why an expectation of Fed rate hikes would cause Treasury prices to fall.

Keynes assumed that money has ________ rate of return.

If the price of gold becomes less volatile,then,other things equal,the demand for stocks will ________ and the demand for antiques will ________.

Holding many risky assets and thus reducing the overall risk an investor faces is called

If prices in the bond market become more volatile,everything else held constant,the demand curve for bonds shifts ________ and interest rates ________.

If the interest rate on a bond is below the equilibrium interest rate,there is an excess ________ of bonds and the bond price will ________.

The demand for houses decreases,all else equal,when

The reduction of brokerage commissions for trading common stocks that occurred in 1975 caused the demand for bonds to ________ and the demand curve to shift to the ________.

When the expected inflation rate increases,the real cost of borrowing ________ and bond supply ________,everything else held constant.

-The figure above illustrates the effect of an increased rate of money supply growth at time period T0.From the figure,one can conclude that the

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

Discovery of new gold in Alaska will ________ the ________ of gold,________ its price,everything else held constant.

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 ________.

If housing prices are expected to increase,then,other things equal,the demand for houses will ________ and that of Treasury bills will ________.