1) 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
Ans:
D) decrease; left
2) 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 ________.
A) rises; right
B) rises; left
C) falls; right
D) falls; left
Ans:
A) rises; right
3) 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 ________.
A) decrease; left
B) decrease; right
C) increase; left
D) increase; right
Ans:
A) decrease; left