Exam 5: The Behavior of Interest Rates

When the growth rate of the money supply is increased,interest rates will fall immediately if the liquidity effect is ________ than the other money supply effects and there is ________ adjustment of expected inflation.

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

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

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?

Of the four effects on interest rates from an increase in the money supply,the initial effect is,generally,the

In the loanable funds framework,the ________ is measured on the vertical axis.

In the loanable funds framework,the ________ curve of bonds is equivalent to the ________ curve of loanable funds.

Use demand and supply analysis to explain why an expectation of Fed rate hikes would cause Treasury prices to fall.

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.

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

In the liquidity preference framework,a one-time increase in the money supply results in a price level effect.The maximum impact of the price level effect on interest rates occurs

Use the following figure to answer the questions : -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

During business cycle expansions when income and wealth are rising,the demand for bonds ________ and the demand curve shifts to the ________,everything else held constant.

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

Interest rates increased continuously during the 1970s.The most likely explanation is

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

You would be less willing to purchase U.S.Treasury bonds,other things equal,if

The demand curve for bonds has the usual downward slope,indicating that at ________ prices of the bond,everything else equal,the ________ is higher.

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

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