ECON 303 Quiz 5

d

During a recession, the supply of bonds ________ and the supply curve shifts to the ________, everything else held constant. a) decreases; right b) increases; left c) increases; right d) decreases; left

d

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 ________. a) rise; right b) fall; right c) rise; left d) fall; left

d

Everything else held constant, when stock prices become less volatile, the demand curve for bonds shifts to the ________ and the interest rate ________. a) left; falls b) right; rises c) right; falls d) left; rises

c

In the figure above, a factor that could cause the demand for bonds to shift to the right is a) an increase in the riskiness of bonds relative to other assets. b) an increase in the expected rate of inflation. c) expectations of lower interest rates in the future. d) a decrease in wealth.

a

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. a) decrease; decrease b) increase; increase c) increase; decrease d) decrease; increase

c

In the market for money, when the Fed decreases the money stock, the money supply curve shifts to the ________ and the interest rate ________, everything else held constant. a) left; falls b) right; rises c) left; rises d) right; falls

b

The demand for houses decreases, all else equal, when a) real estate prices are expected to increase. b) gold prices are expected to increase. c) wealth increases. d) stock prices become more volatile.

b

When an economy grows out of a recession, normally the demand for bonds ________ and the supply of bonds ________, everything else held constant. a) decreases; increases b) increases; increases c) increases; decreases d) decreases; decreases

a

When the expected inflation rate increases, the real cost of borrowing ________ and bond supply ________, everything else held constant. a) decreases; increases b) increases; decreases c) decreases; decreases d) increases; increases