Exam 5: The Behavior of Interest Rates

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

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

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

If the expected return on bonds increases,all else equal,the demand for bonds increases,the price of bonds ________,and the interest rate ________.

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

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

Higher government deficits ________ the supply of bonds and shift the supply curve to the ________,everything else held constant.

If the price of gold becomes less volatile,then,other things equal,the demand for stocks will ________ and the demand for antiques will ________.

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?

If fluctuations in interest rates become smaller,then,other things equal,the demand for stocks ________ and the demand for long-term bonds ________.

The bond supply curve is ________ sloping,indicating a(n)________ relationship between the price and quantity supplied of bonds,everything else equal.

The riskiness of an asset that is unique to the particular asset is

When the government has a surplus,as occurred in the late 1990s,the ________ curve of bonds shifts to the ________,everything else held constant.

The riskiness of an asset is measured by

When the price of a bond decreases,all else equal,the bond demand curve

Everything else held constant,an increase in expected inflation,lowers the expected return on ________ compared to ________ assets.

-In the figure above,a factor that could cause the demand for bonds to decrease (shift to the left)is

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

If the liquidity effect is smaller than the other effects,and the adjustment to expected inflation is slow,then the