1) whenthepriceofabondisabovetheequilibriumprice（1)whenthepriceofabondisabovetheequilibriumprice）.docVIP

IOWA STATE UNIVERSITY Department of Economics Spring 2003 Economics 353: Section 2 Money, Banking and Financial Institutions SAMPLE TEST TWO Chapter 5: The Behavior of Interest Rates 1) When stock prices become less volatile, the ______ curve for bonds shifts to the _____. A) demand; right B) demand; left C) supply; left D) supply; right Answer: B 2) When the federal governments budget deficit decreases, the _____ curve for bonds shifts to the _____. A) demand; right B) demand; left C) supply; left D) supply; right Answer: C 3) When bonds become less widely traded, and a