Exam 5: The Behavior of Interest Rates

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

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.

Holding the expected return on bonds constant,an increase in the expected return on common stocks would ________ the demand for bonds,shifting the demand curve to the ________.

The opportunity cost of holding money is

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 ________.

A higher ________ means that an asset's return is more sensitive to changes in the value of the market portfolio.

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

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

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

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

When the prices of rare coins become volatile,the ________ curve for bonds shifts to the ________,everything else held constant.

A decline in the expected inflation rate causes the demand for money to ________ and the demand curve to shift to the ________,everything else held constant.

Everything else held constant,an increase in the riskiness of bonds relative to alternative assets causes the demand for bonds to ________ and the demand curve to shift to the ________.

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 ________.

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

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

A business cycle expansion increases income,causing money demand to ________ and interest rates to ________,everything else held constant.

In the bond market,the bond demanders are the ________ and the bond suppliers are the ________.

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 ________.