Exam 5: The Behavior of Interest Rates

If the interest rate on a bond is below the equilibrium interest rate,there is an excess ________ of bonds and the bond price will ________.

During a recession,the supply of bonds ________ and the supply curve shifts to the ________,everything else held constant.

Holding everything else constant,

When an economy grows out of a recession,normally the demand for bonds ________ and the supply of bonds ________,everything else held constant.

Holding all other factors constant,the quantity demanded of an asset is

Everything else held constant,when bonds become less widely traded,and as a consequence the market becomes less liquid,the demand curve for bonds shifts to the ________ and the interest rate ________.

Everything else held constant,if the expected return on U.S.Treasury bonds falls from 10 to 5 percent and the expected return on GE stock rises from 7 to 8 percent,then the expected return of holding GE stock ________ relative to U.S.Treasury bonds and the demand for GE stock ________.

When the Fed ________ the money stock,the money supply curve shifts to the ________ and the interest rate ________,everything else held constant.

In the 1990s Japan had the lowest interest rates in the world due to a combination of

If wealth increases,the demand for stocks ________ and that of long-term bonds ________,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.

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

The price of gold should be ________ to the expected inflation rate.

When gold prices become more volatile,the ________ curve for gold shifts to the ________; ________ the price of gold.

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

Everything else held constant,when real estate prices are expected to decrease

When the interest rate changes,

If the price of gold becomes less volatile,then,other things equal,the demand for stocks will ________ and the demand for antiques 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 economist Irving Fisher,after whom the Fisher effect is named,explained why interest rates ________ as the expected rate of inflation ________,everything else held constant.