Exam 5: The Behavior of Interest Rates

When gold prices become more volatile,the ________ curve for gold shifts to the ________;________ the price of gold.

A return to the gold standard,that is,using gold for money will ________ the ________ for gold,________ its price,everything else held constant.

The demand for gold increases,other things equal,when

If stock prices are expected to drop dramatically,then,other things equal,the demand for stocks will ________ and that of Treasury bills will ________.

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

When the interest rate changes,

If brokerage commissions on bond sales decrease,then,other things equal,the demand for bonds will ________ and the demand for real estate will ________.

If there is an excess demand for money,individuals ________ bonds,causing interest rates to ________.

A movement along the bond demand or supply curve occurs when ________ changes.

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

When the interest rate is above the equilibrium interest rate,there is an excess ________ money and the interest rate will ________.

In his Liquidity Preference Framework,Keynes assumed that money has a zero rate of return;thus

During a recession,the supply of bonds ________ and the supply curve shifts to the ________,everything else held constant.

The risk of a well-diversified portfolio depends only on the ________ risk of the assets in the portfolio.

The demand for silver decreases,other things equal,when

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

Holding all other factors constant,the quantity demanded of an asset is

The interest rate falls when either the demand for bonds ________ or the supply of bonds ________.

Everything else held constant,when the government has higher budget deficits

When the price of a bond is ________ the equilibrium price,there is an excess demand for bonds and price will ________.