1. Finance, Saving and Investment a) How are finance, saving and investment inter-related? [1] b) Go to this website: https://www.bankofcanada.ca/rates/interest rates/canadian-bonds/ and look at the table for Government of Canada Marketable Bonds - Average Yield - 1 to 3 Year. Choose the yield for the most recent date in the table. The Face Value (or price of the bond) is not given but assume that it is 500 CAD. i) Calculate the coupon (payment) on this bond? [1] in Calculate the new market price of this bond if a similar investment were yielding 0.1% Explain how this happens in practice. [3] c) Canada had a trade deficit of CAD 857m with Germany in January 2022. Explain why Germany is not lending money to Canada at this point. Explain how this could turn into lending by Germany. [2] d) When the economy begins to recover from the pandemic, what effect would you expect this to have on the demand for loanable funds? Assuming that the supply curve for loanable funds does not change, what would happen to interest rates? Why have interest rates changed in this way? Sketch a graph to support your answer. [4] e) Find the current Canadian inflation rate and any interest rate (you may find a mortgage rate or savings rate from a bank or rate on a credit card etc.). Use the Fisher equation to calculate this rate as a real interest rate. Explain the meaning of real interest rates. [3] f) 1) What has been the effect on the government budget of the pandemic? Explain why this can lead to crowding out. What might the effect be on investment and consumption? Use a graph to support your answer. [4] ii) Why might the effect of this crowding out be reduced given what governments are spending money on? [2] 2. Money and Banking a) What is the benefit to society from using money as a store of value? [2] Jalue? b) Why is it important to control the supply of money? How is this done with cryptocurrencies