Question: 22. A decrease in the expected rate of inflation will ________ the expected return on bonds relative to returns on ________ assets. A. reduce |

22. A decrease in the expected rate of inflation will ________ the expected return on bonds relative to returns on ________ assets. A. reduce | financial B. reduce | real

C. increase | financial D. increase | real

23. The interest rate that is adjusted for actual changes in the price level is called the A. ex post real interest rate. B. expected interest rate. C. ex ante real interest rate.

D. none of the above

  1. 24. When the demand for bonds ________ or the supply of bonds ________, interest rates fall.

    1. Increases | increases

    2. Increases | decreases

    3. Decreases | decreases

    4. Decreases | increases

  2. 25. The demand for an asset rises if ________ falls. A. risk relative to other assets B. expected return relative to other assets C. liquidity relative to other assets

    D. wealth

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