Holding Everything Else Constant,if Interest Rates Are Expected to Increase,the

question 118

Multiple Choice

Holding everything else constant,if interest rates are expected to increase,the demand for bonds ________ and the demand curve shifts ________.

• A)increases;right
• B)decreases;right
• C)increases;left
• D)decreases;left

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Definitions:

Unitary

A term in economics used to describe a situation where a change in one factor leads to a proportionate change in another factor.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, indicating the sensitivity of consumers to price changes.

Specific Excise Tax

A fixed tax imposed on a specific quantity of a good, regardless of its price, typically applied to items such as alcohol and tobacco.

Unitary

In the context of economics, relates to a system where the central government holds all the power, or a market where a product has a unitary elasticity of demand.