Exam 5: The Behavior of Interest Rates

If there is an excess demand for money,individuals ________ bonds,causing interest rates to ________.

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

In the Keynesian liquidity preference framework,a rise in the price level causes the demand for money to ________ and the demand curve to shift to the ________,everything else held constant.

A rise in the price level causes the demand for money to ________ and the interest rate to ________,everything else held constant.

The reduction of brokerage commissions for trading common stocks that occurred in 1975 caused the demand for bonds to ________ and the demand curve to shift to the ________.

When the inflation rate is expected to increase,the ________ for bonds falls,while the ________ curve shifts to the right,everything else held constant.

In the bond market,the market equilibrium shows the market-clearing ________ and market-clearing ________.

The opportunity cost of holding money is

Holding the expected return on bonds constant,an increase in the expected return on common stocks would ________ the demand for bonds,shifting the demand curve to the ________.

Everything else held constant,if interest rates are expected to fall in the future,the demand for long-term bonds today ________ and the demand curve shifts to the ________.

When the expected inflation rate increases,the real cost of borrowing ________ and bond supply ________,everything else held constant.

An increase in an asset's expected return relative to that of an alternative asset,holding everything else constant,________ the quantity demanded of the asset.

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

-In the figure above,the decrease in the interest rate from i₁ to i₂ can be explained by

If fluctuations in interest rates become smaller,then,other things equal,the demand for stocks ________ and the demand for long-term bonds ________.

In the bond market,the bond demanders are the ________ and the bond suppliers are the ________.

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