Exam 5: The Behavior of Interest Rates

When real income ________,the demand curve for money shifts to the ________ and the interest rate ________,everything else held constant.

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

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

If brokerage commissions on bond sales decrease,then,other things equal,the demand for bonds will ________ and the demand for real estate will ________.

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?

The riskiness of an asset is measured by

The supply curve for bonds has the usual upward slope,indicating that as the price ________,ceteris paribus,the ________ increases.

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

The demand for gold increases,other things equal,when

Use the following figure to answer the questions : -In the figure above,a factor that could cause the supply of bonds to shift to the right is:

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 ________.

Use the following figure to answer the questions : -In the figure above,the price of bonds would fall from P₂ to P₁ if

When the price of a bond is above the equilibrium price,there is an excess ________ bonds and price will ________.

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.

Milton Friedman called the response of lower interest rates resulting from an increase in the money supply the ________ effect.

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

If there is an excess supply of money

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

An increase in the expected inflation rate causes the supply of bonds to ________ and the supply curve to shift to the ________,everything else held constant.

When the price level ________,the demand curve for money shifts to the ________ and the interest rate ________,everything else held constant.