lls t6 the right and the demand curve shifts to the left which factor causes tho
ID: 2806567 • Letter: L
Question
lls t6 the right and the demand curve shifts to the left which factor causes those shifts? ABusiness cycle recession B. Increase in expected inflation C. Decrease in expected inflation D. Business cycle boom 31. An decrease in marginal tax rates would likely have the effect of demand for municipal bonds andthe demand for U.S. government bonds. the B. decreasing; decreasing C. increasing: increasing D. decreasing; increasing 32. How does an decrease in stock volatility affect interest rates? A. Stock volatility has nothing to do with interest rates. B. Bonds are relatively more risky compared to stocks, decreasing bond demand thereby increasing interest rates. C. Bonds are relatively less risky compared to stocks, increasing bond demand thereby decreasing interest rates. 33. What does a downward yield curve say about the condition of the economy? A. High economic growth. B. Recession. C. Low economic growth. D. Decline in economic growth and then an increase in economic growth. 34. Which of the following will Not increase the demand for an asset? A. Wealth increases B. The asset's expected return rises relative to other assets. C. The asset's liquidity rises relative to other assets. D. The asset's risk increases relative to other assets. 35. Use Table & to answer questions 3s and 36. The Fed prints $139 which is used to buy US Treasuries. The amount is spent and then deposited into Bank A. The reserve requirement is L 0%. What are the reserves in E? Page 8 ot 12Explanation / Answer
31.
A decrease in marginal tax rate would likely have the effect of decrease the demand for municipal bond and Decrease the demand of US government bond. Because interest income of these two bond are tax free. So, if marginal tax rate decreases then demand of corporate bond increase.
Option (B) is correct answer.
32.
Volatility is a measure of risk, so if volatility in stock market reduce then risk in stock market reduce. Stock volatility is nothing to do with interest.
Option (A) is correct answer.
33.
Yield curve is downward when short-term yield on bond is higher than long term yield on bond. Downward Yield curve mean there is chance of chance of recession in economy and that why investor has very less confidence on economy.
Option (B) is correct answer.
34.
If assets risk is increase relative to other assets then demand of that assets decrease.
Option (D) is correct answer.
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