Exam 5: The Behavior of Interest Rates

When the government has a surplus,as occurred in the late 1990s,the ________ curve of bonds shifts to the ________,everything else held constant.

In the loanable funds framework,the demand curve of loanable funds is

The ________ the returns on two securities move together,the ________ benefit there is from diversification.

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

Everything else held constant,an increase in the liquidity of bonds results in a ________ in demand for bonds and the demand curve shifts to the ________.

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

Everything else held constant,an increase in expected inflation,lowers the expected return on ________ compared to ________ assets.

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

The demand for silver decreases,other things equal,when

Holding everything else equal,if the expected return on My Company stock increases from 10% to 15% and the expected return on That Company stock increases from 10% to 12%,the demand for My Company stock

Use the following figure to nswer the question : -In the figure above,illustrates the effect of an increased rate of money supply growth at time period 0. From the figure,one can conclude that the

In the market for money,a lower level of income causes the demand for money to ________ and the interest rate to ________,everything else held constant.

In Keynes's liquidity preference framework,individuals are assumed to hold their wealth in two forms

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

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

Keynes assumed that money has ________ rate of return.

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.

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.

In Keynes's liquidity preference framework

The interest rate falls when either the demand for bonds ________ or the supply of bonds ________.