122 #
© 2014 Pearson Canada Inc.#5.3 Changes in Equilibrium Interest Rates
A movement along the bond demand or supply curve occurs when ____ changes.
A) bond price
B) income
C) wealth
D) expected return
Answer: A
Diff: 1 Type: MC Page Ref: 90
Skill: Recall
Objective List: 5.3 Outline the factors that cause interest rates to change
When the price of a bond decreases, all else equal, the bond demand curve ____.
A) shifts right
B) shifts left
C) does not shift
D) inverts
Answer: C
Diff: 1 Type: MC Page Ref: 90
Skill: Recall
Objective List: 5.3 Outline the factors that cause interest rates to change
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.
A) falls; right
B) falls; left
C) rises; right
D) rises; left
Answer: C
Diff: 1 Type: MC Page Ref: 90 - 91
Skill: Applied
Objective List: 5.3 Outline the factors that cause interest rates to change
Everything else held constant, when households save less, wealth and the demand for bonds
____ and the bond demand curve shifts ____.
A) increase; right
B) increase; left
C) decrease; right
D) decrease; left
Answer: D
Diff: 1 Type: MC Page Ref: 90 - 91
Skill: Applied
Objective List: 5.3 Outline the factors that cause interest rates to change