Exam 5: The Behavior of Interest Rates

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

The demand for houses decreases,all else equal,when

Using the liquidity preference framework,what will happen to interest rates if the Fed increases the money supply?

In contrast to the CAPM,the APT assumes that there can be several sources of ________ that cannot be eliminated through diversification.

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

-In the figure above,a factor that could cause the demand for bonds to shift to the right is:

A situation in which the quantity of bonds supplied exceeds the quantity of bonds demanded is called a condition of excess supply; because people want to sell ________ bonds than others want to buy,the price of bonds will ________.

The economist Irving Fisher,after whom the Fisher effect is named,explained why interest rates ________ as the expected rate of inflation ________,everything else held constant.

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

-In the figure above,a factor that could cause the supply of bonds to shift to the right is:

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

Everything else held constant,when bonds become less widely traded,and as a consequence the market becomes less liquid,the demand curve for bonds shifts to the ________ and the interest rate ________.

-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

An increase in the expected inflation rate will ________ the ________ for gold,________ its price,everything else held constant.

When the Fed decreases the money stock,the money supply curve shifts to the ________ and the interest rate ________,everything else held constant.

Pieces of property that serve as a store of value are called

A rise in the price level causes the demand for money to ________ and the interest rate to ________,everything else held constant.