Exam 5: The Behavior of Interest Rates

An increase in the expected rate of inflation will ________ the expected return on bonds relative to the that on ________ assets,everything else held constant.

In Keynes's liquidity preference framework,as the expected return on bonds increases (holding everything else unchanged),the expected return on money ________,causing the demand for ________ to fall.

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

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

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

Everything else held constant,during a business cycle expansion,the supply of bonds shifts to the ________ as businesses perceive more profitable investment opportunities,while the demand for bonds shifts to the ________ as a result of the increase in wealth generated by the economic expansion.

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

A decrease in the brokerage commissions in the housing market from 6% to 5% of the sales price will shift the ________ curve for bonds to the ________,everything else held constant.

What is the impact on interest rates when the Federal Reserve decreases the money supply by selling bonds to the public?

The price of gold should be ________ to the expected inflation rate.

Everything else held constant,when real estate prices are expected to decrease

If there is an excess supply of money

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

When the growth rate of the money supply increases,interest rates end up being permanently lower if

Everything else held constant,when stock prices become ________ volatile,the demand curve for bonds shifts to the ________ and the interest rate ________.

If people expect real estate prices to increase significantly,the ________ curve for bonds will shift to the ________,everything else held constant.

Holding everything else constant,

During business cycle expansions when income and wealth are rising,the demand for bonds ________ and the demand curve shifts to the ________,everything else held constant.

________ in the money supply creates excess demand for ________,causing interest rates to ________,everything else held constant.

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?