1. (2 points) It is well known that older people tend to save more. What is the most likely outcome to the equilibrium interest rate if society is aging? (a) Interest rate will go up (b) Interest rate will go down 2. (2 points) Assume that the unbiased expectations hypothesis is true. Suppose the current one-year interest rate is 2%, and suppose the yield of a two-year bond is currently 3%. What is the market expectation of the one-year interest rate for next year? (a) Around 1% (b) Around 2\% (c) Around 3\% (d) Around 4\%