120 #
© 2014 Pearson Canada Inc.#5.2 Supply and Demand in the Bond Market
The demand curve for bonds has the usual downward slope, indicating that at ____ prices
of the bond, everything else equal, the ____ is higher.
A) higher; demand
B) higher; quantity demanded
C) lower; demand
D) lower; quantity demanded
Answer: D
Diff: 1 Type: MC Page Ref: 87
Skill: Recall
Objective List: 5.2 Describe supply and demand in the bond market
The supply curve for bonds has the usual upward slope, indicating that as the price ____,
ceteris paribus, the ____ increases.
A) falls; supply
B) falls; quantity supplied
C) rises; supply
D) rises; quantity supplied
Answer: D
Diff: 1 Type: MC Page Ref: 88
Skill: Recall
Objective List: 5.2 Describe supply and demand in the bond market
In the bond market, the market equilibrium shows the market-clearing ____ and market-
clearing ____.
A) price; deposit
B) interest rate; deposit
C) price; interest rate
D) interest rate; premium
Answer: C
Diff: 1 Type: MC Page Ref: 89
Skill: Recall
Objective List: 5.2 Describe supply and demand in the bond market
When the price of a bond is above the equilibrium price, there is an excess ____ bonds
and price will ____.
A) demand for; rise
B) demand for; fall
C) supply of; fall
D) supply of; rise
Answer: C
Diff: 1 Type: MC Page Ref: 89
Skill: Recall
Objective List: 5.2 Describe supply and demand in the bond market