1) The reduction of brokerage commissions for trading common stocks that occurred in 1975 caused the demand for bonds to ________ and the demand curve to shift to the ________.
A) fall; right
B) fall, left
C) rise; right
D) rise; left
2) Factors that decrease the demand for bonds include
A) an increase in the volatility of stock prices.
B) a decrease in the expected returns on stocks.
C) a decrease in the inflation rate.
D) a decrease in the riskiness of stocks.
3) During a recession, the supply of bonds ________ and the supply curve shifts to the _______everything else held constant.
A) increases; left
B) increases; right
C) decreases; left
D) decreases; right
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