1) Everything else held constant, an increase in expected inflation, lowers the expected return on ________ compared to ________ assets.
A) bonds; financial
B) bonds; real
C) physical; financial
D) physical; real
2) Everything else held constant, an increase in the riskiness of bonds relative to alternative assets causes the demand for bonds to ________ and the demand curve to shift to the ________.
A) rise; right
B) rise; left
C) fall; right
D) fall; left
3) 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