Exam 5: The Behaviour of Interest Rates

-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 ________.

An increase in an asset's expected return relative to that of an alternative asset,holding everything else constant,________ the quantity demanded of the asset.

In the Keynesian liquidity preference framework,an increase in the interest rate causes the demand curve for money to ________,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.

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

Everything else held constant,when households save less,wealth and the demand for bonds ________ and the bond demand curve shifts ________.

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

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

What is the impact on interest rates when the Bank of Canada decreases the money supply by selling bonds to the public?

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

-In the figure above,the factor responsible for the decline in the interest rate is ________.

-In the 1990s Japan had the lowest interest rates in the world due to a combination of ________.

In the Keynesian liquidity preference framework,a rise in the price level causes the demand for money to ________ and the demand curve to shift to the ________,everything else held constant.

Of the four factors that influence asset demand,which factor will cause the demand for all assets to increases,everything else held constant?

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,the decrease in the interest rate from i1 to i2 can be explained by ________.

When stock prices become more volatile,the ________ curve for gold shifts right and gold prices ________,everything else held constant.

In the liquidity preference framework,demonstrate graphically the effect of a decrease in the money supply.Indicate on the graph the excess demand or excess supply of money.Explain the process of adjustment that results in a change in the equilibrium interest rate,and the direction of the change in rates.

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

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