QUIZ M4
decrease decrease
A lower level of income causes the demand for money to ________ and the interest rate to ________, everything else held constant.
decrease left
During a recession, the supply of bonds ________ and the supply curve shifts to the ________, everything else held constant.
rises right
During business cycle expansions when income and wealth are rising, the demand for bonds ________ and the demand curve shifts to the ________, everything else held constant.
fall left
Everything else held constant, an increase in the riskiness of bonds relative to alternative assets causes the demand for bonds to ________ and the demand curve to shift to the ________.
the interest rate
The opportunity cost of holding money is ________.
demand supply
When the inflation rate is expected to increase, the ________ for bonds falls, while the ________ curve shifts to the right, everything else held constant.
demand fall
When the interest rate is above the equilibrium interest rate, there is an excess ________ money and the interest rate will ________.
below rise
When the price of a bond is ________ the equilibrium price, there is an excess demand for bonds and price will ________.
decrease demand for rise
________ in the money supply creates excess ________ money, causing interest rates to ________, everything else held constant.