When the interest rate on band is _ quilibrium interest rate, in the bond amrket there is excess and interest rate will _
Answers
Explanation:
If interest rates on Treasury bonds are suddenly expected to shoot up, then, ... B) the market for silver bullion becomes more liquid.
Chapter 5 The Behavior of Interest Rates
1) 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 _____.
A) rises; rises B) rises; falls C) falls; rises D) falls; falls
Answer: D
5) If the expected return on CBS stock rises from 5 to 10 percent and the expected return on NBC stock rises from 12 to 18 percent, then the expected return of holding CBS stock _____ relative to NBC stock and the demand for CBS stock _____.
A) rises; rises B) rises; falls C) falls; rises D) falls; falls
Answer: D
10) If wealth increases, the demand for stocks _____ and that of long-term bonds _____.
A) increases; increases B) increases; decreases
C) decreases; decreases D) decreases; increases
Answer: A
15) If interest rates on Treasury bonds are suddenly expected to shoot up, then, other things equal, the demand for houses will _____ and that of Treasury bonds will _____.
A) increase; increase B) increase; decrease
C) decrease; decrease D) decrease; increase
Answer: B