Econ 2035 Ch5.2

When the interest rate on a bond is above the equilibrium interest rate, in the bond market there is excess ________ and the interest rate will ________.

demand;fall

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

demand;rise

The bond demand curve is ________ sloping, indicating a(n) ________ relationship between the price and quantity demanded of bonds

downward;inverse

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

lenders;borrowers

The demand curve for bonds has the usual downward slope, indicating that at ________ prices of the bond, everything else equal, the ________ is higher

lower;quantity demanded

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

price;interest rate

The bond supply curve is ________ sloping, indicating a(n) ________ relationship between the price and quantity supplied of bonds

upward;direct

If the price of bonds is set ________ the equilibrium price, the quantity of bonds demanded exceeds the quantity of bonds supplied, a condition called excess ________.

below;demand

When the interest rate on a bond is ________ the equilibrium interest rate, in the bond market there is excess ________ and the interest rate will ________.

above;demand;fall

The supply curve for bonds has the usual upward slope, indicating that as the price ________, ceteris paribus, the ________ increases

rises;quantity supplied

When the price of a bond is above the equilibrium price, there is an excess ________ bonds and price will ________.

supply of;fall

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

supply;fall

When the price of a bond is ________ the equilibrium price, there is an excess demand for bonds and price will ________.

below;rise

A situation in which the quantity of bonds supplied exceeds the quantity of bonds demanded is called a condition of excess supply; because people want to sell ________ bonds than others want to buy, the price of bonds will ________.

more;fall