Exam 4: Why Do Interest Rates Change

An increase in the expected rate of inflation will ________ the expected return on bonds relative to that on ________ assets, and shift the ________ curve to the left.

The demand for an asset rises if ________ falls.

A decline in the price level causes the demand for money to ________ and the demand curve to shift to the ________

When the quantity of bonds demanded equals the quantity of bonds supplied, there is

Factors that can cause the supply curve for bonds to shift to the left include

The economist Irving Fisher, after whom the Fisher effect is named, explained why interest rates ________ as the expected rate of inflation ________.

During an economic expansion, the supply of bonds ________ and the supply curve shifts to the ________.

A lower level of income causes the demand for money to ________ and the interest rate to ________

A higher level of income causes the demand for money to ________ and the interest rate to ________

An increase in expected inflation causes the supply of bonds to ________ and the supply curve to shift to the ________.

What is the model whose equations are estimated using statistical procedures used in forecasting interest rates called?

When the expected inflation rate decreases, the demand for bonds ________, the supply of bonds ________, and the interest rate ________.

When bonds become more widely traded, and as a consequence the market becomes more liquid, the demand curve for bonds shifts to the ________ and the interest rate ________.

Figure 4.3 -In Figure 4.3, the factor responsible for the decline in the interest rate is

When stock prices become less volatile, the demand curve for bonds shifts to the ________ and the interest rate ________.

Figure 4.1 -In Figure 4.1, the most likely cause of the increase in the equilibrium interest rate from i₁ to i₂ is a(n)________ in the ________.

When the federal government's budget deficit increases, the ________ curve for bonds shifts to the ________.

Factors that determine the demand for an asset include changes in the

When bond prices become more volatile, the demand for bonds ________ and the interest rate ________.

When prices in the stock market become more uncertain, the demand curve for bonds shifts to the ________ and the interest rate ________.