(7)If gold becomes acceptable as a med ium of exchange,the demand for gold will and the demand for bonds will,everything else held constant. A)decrease;decrease B)decrease;increase C)increase;increase D)increase;decrease (8)Holding everything else constant, A)if asset A's risk rises relative to that of alternative assets,the demand will increase for asset A. B)the more liquid is asset A,relative to alternative assets,the greater will be the demand for asset A. C)the lower the expected return to asset A relative to alternative assets,the greater will be the demand for asset A. D)if wealth increases,demand for asset A increases and demand for alternative assets decreases. (9) A situation in which the quantity of bonds supplied exceeds the quantity of bonds demanded is called a condition of excess supply;because people want to sell bonds than others want to buy,the price of bonds will A)fewer;fall B)fewer;rise C)more;fall D)more;rise (10)When the interest rate changes, A)the demand curve for bonds shifts to the right B)the demand curve for bonds shifts to the left. C)the supply curve for bonds shifts to the right. D)it is because either the demand or the supply curve has shifted. 2.Multiple Choice (1)Which of the following are FALSE for discount bonds?(). A)A discount bond is bought at par. B)The purchaser receives the face value of the bond at the maturity date. C)U.S.Treasury bonds and notes are examples of discount bonds D)The purchaser receives the par value at maturity plus any capital gains. (2)Which of the following are FALSE for a coupon bond?(). A)When the coupon bond is priced at its face value,the yield to maturity equals the(7) If gold becomes acceptable as a medium of exchange, the demand for gold will ________ and the demand for bonds will ________, everything else held constant. A) decrease; decrease B) decrease; increase C) increase; increase D) increase; decrease (8) Holding everything else constant, A) if asset A's risk rises relative to that of alternative assets, the demand will increase for asset A. B) the more liquid is asset A, relative to alternative assets, the greater will be the demand for asset A. C) the lower the expected return to asset A relative to alternative assets, the greater will be the demand for asset A. D) if wealth increases, demand for asset A increases and demand for alternative assets decreases. (9) A situation in which the quantity of bonds supplied exceeds the quantity of bonds demanded is called a condition of excess supply; because people want to sell ________ bonds than others want to buy, the price of bonds will ________. A) fewer; fall B) fewer; rise C) more; fall D) more; rise (10) When the interest rate changes, ________. A) the demand curve for bonds shifts to the right. B) the demand curve for bonds shifts to the left. C) the supply curve for bonds shifts to the right. D) it is because either the demand or the supply curve has shifted. 2. Multiple Choice (1) Which of the following are FALSE for discount bonds? ( ). A) A discount bond is bought at par. B) The purchaser receives the face value of the bond at the maturity date. C) U.S. Treasury bonds and notes are examples of discount bonds. D) The purchaser receives the par value at maturity plus any capital gains. (2) Which of the following are FALSE for a coupon bond? ( ). A) When the coupon bond is priced at its face value, the yield to maturity equals the