When the Fed decreases the money stock, the money supply curve shifts to the ________ and the interest rate _____ everything else held constant. right; rises right; falls left; falls left; rises In actual practice, short-term interest rates and long-term interest rates usually move together. this is the major shortcoming of the segmented markets theory. expectations theory liquidity premium theory. separable markets theory. If the amount payable in two years is $2420 for a simple loan at 10 percent interest, the loan amount is $1000. $1210. $2000. $2200 Everything else held constant, when the government has higher budget deficits the demand curve for bonds shifts to the left and the interest rate rises. the demand curve for bonds shifts to the left and the interest rate falls. the supply curve for bonds shifts to the right and the interest rate falls. the supply curve for bonds shifts to the right and the interest rate rises. Everything else held constant, if the tax-exempt status of municipal bonds were eliminated then the interest rates on municipal bonds would still be less than the interest rate on Treasury bonds. the interest rate on municipal the interest rate on municipal bonds would exceed rate on Treasury bonds. the interest rates on municipal, Treasury and the bonds would all increase. To claim that a lottery winner who is to receive $1 million per year for twenty years has won $20 million ignores the process of face value. par value. deflation. discounting the future