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41.  In Figure 6-1, the most likely cause of the increase in the equilibrium interest rate from i1 to i2 is

a.  an increase in the expected inflation rate.

b.  a decrease in the expected inflation rate.

c.  a sharp decline in the growth rate of the money supply.

d.  a combination of both (a) and (c) of the above.

42.  In Figure 6-1, the most likely cause of the increase in the equilibrium interest rate from i1 to i2 is

a.  an expected decrease in the government budget deficit.

b.  an expected increase in the government budget deficit.

c.  a sharp decline in the growth rate of the money supply.

d.  a combination of both (a) and (c) of the above.

43. The term structure of interest rates is

a.  the relationship among interest rates of different bonds with the same maturity.

b.  the structure of how interest rates move over time.

c.  the relationship among the term to maturity of different bonds.

d.  the relationship among interest rates on bonds with different maturities.

44.  The risk structure of interest rates is

a.  the structure of how interest rates move over time.

b.  the relationship among interest rates of different bonds with the same maturity.

c.  the relationship among the term to maturity of different bonds.

d.  the relationship among interest rates on bonds with different

maturities.

45. When the default risk in corporate bonds increases, other things equal, the demand curve for corporate bonds shifts to the _____ and the demand curve for Treasury bonds shifts to the _____.

a.  right;right

b.  right;left

c.  left;left

d.  left;right

46.  When the Treasury bond market becomes more liquid, other things equal, the demand curve for corporate bonds shifts to the _____ and the demand curve for Treasury bonds shifts to the _____.

a.  right;right

b.  right;left

c.  left;left

d.  left;right

47. The risk premium on corporate bonds becomes smaller if

a.  the riskiness of corporate bonds increases.

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