Exam 5: The Behaviour of Interest Rates

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

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

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

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

Use demand and supply analysis to explain why an expectation of interest rate hikes would cause Government bond prices to fall.

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

-In the figure above, the price of bonds would fall from P₁ to P₂ if ________.

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

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