*An increase in the liquidity of bonds should cause the demand curve for bonds to shift to the ____ , and consequently, the equilibrium price should ____ .
| left; fall *Suppose that there is $400 in cash and $160 in travelers checks in the economy, and nothing else. Then M1 must be $ ____ and the amount of M2 is $ ____ . | 400; 560 *When firms find that there are more profitable business opportunities, then in the bond market, the supply curve for bonds should shift ____ and as a result, we would expect that the equilibrium interest rate will ____. | left; fall *In the economy there is a decrease in wealth levels and at the same time the government's budget deficit spending falls. In the bond market, we would expect that the market clearing (ie, equilibrium) price will do what? | it's impossible to tell which direction the price will go | | none of the above *In the market for bonds, say that liquidy levels increase and expected inflation decreases. Then in this market, the equilibrium interest rate for bonds | could go up or down, it's impossible to tell | | | | |
