Exam 5: The Behavior of Interest Rates

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

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

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.

-In the figure above,the decrease in the interest rate from i₁ to i₂ can be explained by

-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

If the price of diamonds is expected to decrease,all else equal,then the demand for diamonds ________ and the demand for platinum ________.

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.

Everything else held constant,when prices in the art market become more uncertain

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

When the interest rate on a bond is ________ the equilibrium interest rate,in the bond market there is excess ________ and the interest rate will ________.

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

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

-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

In Keynes's liquidity preference framework,if there is excess demand for money,there is

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

Factors that decrease the demand for bonds include

If brokerage commissions on stocks fall,everything else held constant,the demand for bonds ________,the price of bonds ________,and the interest rate ________.

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

The demand for houses decreases,all else equal,when