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?

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

Everything else held constant, a decrease in wealth

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.

Everything else held constant, if the expected return on ABC 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 ABC stock and the demand for CBS stock ______.

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 ______.

If housing prices are expected to increase, then, other things equal, the demand for houses will ______ and that of Treasury bills will ______.

If stock prices are expected to drop dramatically, then, other things equal, the demand for stocks will ______ and that of Treasury bills will ______.

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 ______.

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 ______.

An increase in the expected rate of inflation will ______ the expected return on bonds relative to that on ______ assets, everything else held constant.

If fluctuations in interest rates become smaller, then, other things equal, the demand for stocks ______ and the demand for long-term bonds ______.

If the price of gold becomes less volatile, then, other things equal, the demand for stocks will ______ and the demand for antiques will ______.

If brokerage commissions on bond sales decrease, then, other things equal, the demand for bonds will ______ and the demand for real estate will ______.

If gold becomes acceptable as a medium of exchange, the demand for gold will ______ and the demand for bonds will ______, everything else held constant.

The demand for Picasso paintings rises (holding everything else equal) when

The demand for silver decreases, other things equal, when

You would be less willing to purchase U.S. Treasury bonds, other things equal, if

You would be more willing to buy AT&T bonds (holding everything else constant) if

The demand for gold increases, other things equal, when

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

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

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

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

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

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

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 ______.

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

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 ______.

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 ______.

A movement along the bond demand or supply curve occurs when ______ changes.

When the price of a bond decreases, all else equal, the bond demand curve ______.

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.

Everything else held constant, when households save less, wealth and the demand for bonds _______, and the bond demand curve shifts _______.

Everything else held constant, if interest rates are expected to fall in the future, the demand for long-term bonds today _______ and the demand curve shifts to the _______.

Holding the expected return on bonds constant, an increase in the expected return on common stocks would _______ the demand for bonds, shifting the demand curve to the _______.

Everything else held constant, an increase in expected inflation, lowers the expected return on _______ compared to _______ assets.

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 _______.

Everything else held constant, when stock prices become less volatile, the demand curve for bonds shifts to the _______ and the interest rate _______.

Everything else held constant, when stock prices become _______ volatile, the demand curve for bonds shifts to the _______ and the interest rate _______.

Everything else held constant, an increase in the liquidity of bonds results in a _______ in demand for bonds and the demand curve shifts to the _______.

Everything else held constant, when bonds become less widely traded, and as a consequence the market becomes less liquid, the demand curve for bonds shifts to the _______ and the interest rate _______.

The reduction of brokerage commissions for trading common stocks that occurred in 1975 caused the demand for bonds to _______ and the demand curve to shift to the _______.

Factors that decrease the demand for bonds include

During a recession, the supply of bonds _______ and the supply curve shifts to the ______, everything else held constant.

In a business cycle expansion, the _______ of bonds increases and the _______ curve shifts to the _______, as business investments are expected to be more profitable.

When the expected inflation rate increases, the real cost of borrowing _______ and bond supply _______, everything else held constant.

An increase in the expected inflation rate causes the supply of bonds to _______ and the supply curve to shift to the _______, everything else held constant.

Higher government deficits _______ the supply of bonds and shift the supply curve to the _______, everything else held constant.

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

When the inflation rate is expected to increase, the _______ for bonds falls, while the _______ curve shifts to the right, everything else held constant.

When the expected inflation rate increases, the demand for bonds _______, the supply of bonds _______, and the interest rate _______, everything else held constant.

Everything else held constant, when the inflation rate is expected to rise, interest rates will _______; this result has been termed the _______.

The economist Irving Fisher, after whom the Fisher effect is named, explained why interest rates _______ as the expected rate of inflation _______, everything else held constant.

Everything else held constant, during a business cycle expansion, the supply of bonds shifts to the _______, as businesses perceive more profitable investment opportunities, while the demand for bonds shifts to the _______ as a result of the increase in wealth generated by the economic expansion.

When the economy slips into a recession, normally the demand for bonds _______, the supply of bonds _______, and the interest rate _______, everything else held constant.

When an economy grows out of a recession, normally the demand for bonds _______ and the supply of bonds _______, everything else held constant.

Deflation causes the demand for bonds to ______, the supply of bonds to ______, and bond prices to ______, everything else held constant.

In the 1990s Japan had the lowest interest rates in the world due to a combination of

When the interest rate changes,

The interest rate falls when either the demand for bonds ______ or the supply of bonds ______.

When the government has a surplus, as occurred in the late 1990s, the ______ curve of bonds shifts to the ______, everything else held constant.

A decrease in the brokerage commissions in the housing market from 6% to 5% of the sales price will shift the ______ curve for bonds to the ______, everything else held constant.

When rare coin prices become volatile, the ______ curve for bonds shifts to the ______, everything else held constant.

If people expect real estate prices to increase significantly, the ______ curve for bonds will shift to the ______, everything else held constant.

Everything else held constant, when prices in the art market become more uncertain,

Everything else held constant, when real estate prices are expected to decrease

Everything else held constant, when the government has higher budget deficits

If stock prices are expected to climb next year, everything else held constant, the ______ curve for bonds shifts ______ and the interest rate ______.

If prices in the bond market become more volatile, everything else held constant, the demand curve for bonds shifts ______ and interest rates ______.

If brokerage commissions on stocks fall, everything else held constant, the demand for bonds ______, the price of bonds ______ and the interest rate ______.

If the expected return on bonds increases, all else equal, the demand for bonds increases, the price of bonds ______, and the interest rate ______.

Refer to the figure showing bond market supply and demand with curves labeled B^s_1, B^s_2, B^d_1, B^d_2 and prices P_1 and P_2. In the figure above, a factor that could cause the supply of bonds to shift to the right is:

Refer to the same figure. In the figure above, a factor that could cause the demand for bonds to decrease (shift to the left) is:

Refer to the same figure. In the figure above, the price of bonds would fall from P_1 to P_2

Refer to the figure showing bond market supply and demand with curves labeled B^s_1, B^s_2, B^d_1, B^d_2 and prices P_1 and P_2. In the figure above, a factor that could cause the supply of bonds to increase (shift to the right) is:

Refer to the same figure. In the figure above, a factor that could cause the demand for bonds to shift to the right is:

Refer to the same figure. In the figure above, the price of bonds would fall from P_2 to P_1 if

In Keynes's liquidity preference framework, individuals are assumed to hold their wealth in two forms:

In Keynes's liquidity preference framework,

In Keynes's liquidity preference framework, if there is excess demand for money, there is

The bond supply and demand framework is easier to use when analyzing the effects of changes in ______ while the liquidity preference framework provides a simpler analysis of the effects from changes in income, the price level, and the supply of ______.

Keynes assumed that money has ______ rate of return.

In his Liquidity Preference Framework, Keynes assumed that money has a zero rate of return; thus,

In Keynes's liquidity preference framework, as the expected return on bonds increases (holding everything else unchanged), the expected return on money ______, causing the demand for ______ to fall.

The opportunity cost of holding money is

An increase in the interest rate

If there is an excess supply of money

When the interest rate is above the equilibrium interest rate, there is an excess ______ money and the interest rate will ______.

In the market for money, an interest rate below equilibrium results in an excess ______ money and the interest rate will ______.

In the Keynesian liquidity preference framework, an increase in the interest rate causes the demand curve for money to ______, everything else held constant.

A lower level of income causes the demand for money to ______ and the interest rate to ______, everything else held constant.

When real income _______, the demand curve for money shifts to the _______ and the interest rate _______, everything else held constant.

A business cycle expansion increases income, causing money demand to _______ and interest rates to _______, everything else held constant.

In the Keynesian liquidity preference framework, a rise in the price level causes the demand for money to _______ and the demand curve to shift to the _______, everything else held constant.

When the price level _______, the demand curve for money shifts to the _______ and the interest rate _______, everything else held constant.

A rise in the price level causes the demand for money to _______ and the interest rate to _______, everything else held constant.

When the price level falls, the _______ curve for nominal money _______ and interest rates _______, everything else held constant.

A decline in the expected inflation rate causes the demand for money to _______ and the demand curve to shift to the _______, everything else held constant.

When the Fed decreases the money stock, the money supply curve shifts to the _______ and the interest rate _______, everything else held constant.

When the Fed _______ the money stock, the money supply curve shifts to the _______ and the interest rate _______, everything else held constant.

_______ in the money supply creates excess _______ money, causing interest rates to _______, everything else held constant.

______ in the money supply creates excess demand for ______, causing interest rates to ______, everything else held constant.

When the price level falls, the ______ curve for nominal money ______, and interest rates ______, everything else held constant.

Refer to the figure: Interest Rate vs. Quantity of Money, showing money demand shifting from $$M^d_1$$ to $$M^d_2$$ with vertical money supply $$M^s$$ and interest rates falling from $$i_1$$ to $$i_2$$ . In the figure above, one factor not responsible for the decline in the demand for money is

Refer to the figure: Interest Rate vs. Quantity of Money, showing money demand shifting from $$M^d_1$$ to $$M^d_2$$ with vertical money supply $$M^s$$ and interest rates falling from $$i_1$$ to $$i_2$$ . In the figure above, the decrease in the interest rate from $$i_1$$ to $$i_2$$ can be explained by

Refer to the figure: Interest Rate vs. Quantity of Money, showing vertical money supplies $$M^s_1$$ and $$M^s_2$$ with downward-sloping money demand $$M^d$$ and interest rates from $$i_1$$ to $$i_2$$ . In the figure above, the factor responsible for the decline in the interest rate is

Refer to the figure: Interest Rate vs. Quantity of Money, showing vertical money supplies $$M^s_1$$ and $$M^s_2$$ with downward-sloping money demand $$M^d$$ and interest rates from $$i_1$$ to $$i_2$$ . In the figure above, the decrease in the interest rate from $$i_1$$ to $$i_2$$ can be explained by

Milton Friedman called the response of lower interest rates resulting from an increase in the money supply the ______ effect.

Of the four effects on interest rates from an increase in the money supply, the initial effect is, generally, the

In the liquidity preference framework, a one-time increase in the money supply results in a price level effect. The maximum impact of the price level effect on interest rates occurs

Of the four effects on interest rates from an increase in the money supply, the one that works in the opposite direction of the other three is the

It is possible that when the money supply rises, interest rates may ______ if the ______ effect is more than offset by changes in income, the price level, and expected inflation.

When the growth rate of the money supply increases, interest rates end up being permanently lower if

When the growth rate of the money supply is increased, interest rates will fall immediately if the liquidity effect is ______ than the other money supply effects and there is ______ adjustment of expected inflation.

If the Fed wants to permanently lower interest rates, then it should raise the rate of money growth if

If the liquidity effect is smaller than the other effects, and the adjustment to expected inflation is slow, then the

If the liquidity effect is smaller than the other effects, and the adjustment to expected inflation is immediate, then the

Refer to the figure showing interest rate over time with an immediate rise from i1 toward i2 after time 0. From the figure, one can conclude that the

Refer to the same figure showing interest rate over time with an immediate rise from i1 toward i2 after time 0. From the figure, one can conclude that the

The figure shows interest rate over time with an initial level i1 above i2 and a drop at T0 followed by a gradual rise toward i2 below i1. From the figure, one can conclude that the

Refer to the same figure with i1 above i2 and a drop at T0 followed by a gradual rise toward i2. From the figure, one can conclude that the

The figure shows interest rate over time with an initial dip after T0 from i1, then a rise above i2 by the end. From the figure, one can conclude that the

Refer to the same figure with an initial dip after T0 from i1 and a rise above i2 by the end. From the figure, one can conclude that the

Interest rates increased continuously during the 1970s. The most likely explanation is

The riskiness of an asset is measured by

Holding many risky assets and thus reducing the overall risk an investor faces is called

The ______ the returns on two securities move together, the ______ benefit there is from diversification.

A higher ______ means that an asset’s return is more sensitive to changes in the value of the market portfolio.