Exam 4: Determining Interest Rates

During an economic recession,

An increase in expected inflation results in

How is the interest rate that prevails in the bond market determined?

If the government increases taxes while holding expenditures constant,

The supply curve for bonds would be shifted to the right by

If the expected gains on stocks rise,while the expected returns on bonds do not change,then

The demand curve for bonds would be shifted to the left by

As wealth increases in the economy,savers are willing to

In the market for loanable funds,the seller is considered to be

If you think that there is a 75% chance of a stock increasing by 8% and a 25% change of it falling by 20%,what is the expected return on the stock? Report using percentages with two decimal places.

An open economy is one that

Suppose there's an 80% chance of a stock rising by 20% and a 20% chance of it falling by 40%.What is the expected rate of return on the stock?

Since Germany is a large open economy,the increase in German borrowing and investment in what was formerly East Germany in the early 1990s resulted in

As wealth increases in the economy,savers are willing to

Suppose that businesses in Japan reduce their spending on plant and equipment.What will be the effect on spending on plant and equipment by businesses in the United States?

Loanable funds refers to

The bond supply curve slopes up because

Which is the best example of idiosyncratic risk?

During a period of economic expansion,when expected profitability is high,

The supply curve of loanable funds slopes up because