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© 2014 Pearson Canada Inc.#
Everything else held constant, when stock prices become less volatile, the demand curve for
bonds shifts to the ____ and the interest rate ____.
A) right; rises
B) right; falls
C) left; falls
D) left; rises
Answer: D
Diff: 1 Type: MC Page Ref: 93
Skill: Applied
Objective List: 5.3 Outline the factors that cause interest rates to change
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 ____.
A) rise; right
B) rise; left
C) fall; right
D) fall; left
Answer: A
Diff: 1 Type: MC Page Ref: 93
Skill: Applied
Objective List: 5.3 Outline the factors that cause interest rates to change
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 ____.
A) right; rises
B) right; falls
C) left; falls
D) left; rises
Answer: D
Diff: 1 Type: MC Page Ref: 93
Skill: Applied
Objective List: 5.3 Outline the factors that cause interest rates to change
During a recession, the supply of bonds ____ and the supply curve shifts to the
____, everything else held constant.
A) increases; left
B) increases; right
C) decreases; left
D) decreases; right
Answer: C
Diff: 1 Type: MC Page Ref: 93
Skill: Applied
Objective List: 5.3 Outline the factors that cause interest rates to change