Money Banking and Financial Markets

Business

Quiz 5 :

The Behavior of Interest Rates

Quiz 5 :

The Behavior of Interest Rates

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Pieces of property that serve as a store of value are called
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A

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Of the four factors that influence asset demand,which factor will cause the demand for all assets to increase when it increases,everything else held constant?
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A

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

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Everything else held constant,a decrease in wealth
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An increase in an asset's expected return relative to that of an alternative asset,holding everything else constant,________ the quantity demanded of the asset.
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Everything else held constant,if the expected return on Disney stock rises from 5 to 10 percent and the expected return on CBS stock is unchanged,then the expected return of holding CBS stock ________ relative to Disney stock and the demand for CBS stock ________.
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Everything else held constant,if the expected return on U.S. Treasury bonds falls from 10 to 5 percent and the expected return on GE stock rises from 7 to 8 percent,then the expected return of holding GE stock ________ relative to U.S. Treasury bonds and the demand for GE stock ________.
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If housing prices are expected to increase,then,other things equal,the demand for houses will ________ and that of Treasury bills will ________.
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If stock prices are expected to drop dramatically,then,other things equal,the demand for stocks will ________ and that of Treasury bills will ________.
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Everything else held constant,if the expected return on RST stock declines from 12 to 9 percent and the expected return on XYZ stock declines from 8 to 7 percent,then the expected return of holding RST stock ________ relative to XYZ stock and demand for XYZ stock ________.
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Everything else held constant,if the expected return on U.S. Treasury bonds falls from 8 to 7 percent and the expected return on corporate bonds falls from 10 to 8 percent,then the expected return of corporate bonds ________ relative to U.S. Treasury bonds and the demand for corporate bonds ________.
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An increase in the expected rate of inflation will ________ the expected return on bonds relative to the that on ________ assets,everything else held constant.
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If fluctuations in interest rates become smaller,then,other things equal,the demand for stocks ________ and the demand for long-term bonds ________.
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If the price of gold becomes less volatile,then,other things equal,the demand for stocks will ________ and the demand for antiques will ________.
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If brokerage commissions on bond sales decrease,then,other things equal,the demand for bonds will ________ and the demand for real estate will ________.
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If gold becomes acceptable as a medium of exchange,the demand for gold will ________ and the demand for bonds will ________,everything else held constant.
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The demand for Picasso paintings rises (holding everything else equal)when
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The demand for silver decreases,other things equal,when
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You would be less willing to purchase U.S. Treasury bonds,other things equal,if
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You would be more willing to buy AT&T bonds (holding everything else constant)if
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