1) In the figure above, a factor that could cause the demand for bonds to decrease (shift to the left) is:
A) an increase in the expected return on bonds relative to other assets.
B) a decrease in the expected return on bonds relative to other assets.
C) an increase in wealth.
D) a reduction in the riskiness of bonds relative to other assets.
2) In the figure above, a factor that could cause the supply of bonds to increase (shift to the right) is:
A) a decrease in government budget deficits.
B) a decrease in expected inflation.
C) expectations of more profitable investment opportunities.
D) a business cycle recession.
3) In the figure above, a factor that could cause the demand for bonds to shift to the right is:
A) an increase in the riskiness of bonds relative to other assets.
B) an increase in the expected rate of inflation.
C) expectations of lower interest rates in the future.
D) a decrease in wealth.