26. Suppose that the expected return on common stocks increases, whereas the expected return on bonds stays the same.This would ________ the demand for bonds, shifting the demand curve to the ________. Select one: a.decrease; left b.decrease; right c.increase; left d.increase; right 27. Monetary economists confirm the following statement. It is possible that when the money supply rises, interest rates may ________ if the ________ effect is more than offset by changes in income, the price level, and expected inflation. Select one: a.fall; liquidity b.fall; risk c.rise; liquidity d.rise; risk 28. The Taylor Principle states that when the inflation rate rises, the nominal interest rate should be ________ by ________ than the inflation rate increase. Select one: a.increased; more b.increased; less c.decreased; more d.decreased; less 29. An inverted yield curve Select one: a.slopes up. b.is flat. c.slopes down. d.has a U shape. 30. If the expected future domestic exchange rate falls, then it causes the demand for domestic assets to ________ and the domestic currency to ________, everything else held constant. Select one: a.increase; appreciate b.increase; depreciate c.decrease; appreciate d.decrease; depreciate