1. The Federal Reserve has been primarily concerning about rising unemployment as it sets course for monetary policy. (Tor F) 2. If the tax cut that was enacted this year increases the budget deficit and national debt, as many analysts believe it will, in theory interest rates should increase. (Tor F) 3. Municipal bonds are most appealing for individuals and companies that are in higher tax brackets relative to those in lower tax brackets (Tor F) 4. The yield (return) on a AAA rated bond will generally be lower than the yield on a same maturity BB bond. (T or F) 5. Money market securities are generally less liquid than capital market securities, like bonds (Tor F) 6. Based on the liquidity premium theory of the yield curve, we can use the yield curve to forecast future short-term interest rates. (T or F) 7. The lag between when the government Federal Reserve realizes a change and then acts to do something about it is: a. Impact lag b. Recognition lag c. Implementation lag d. Reaction lag 8. Which of the following statements about bond ratings is TRUE? a. Bond rating agencies rate bonds, not firms. Each bonds issue gets a rating. b. Investment grade bonds are rated BB or above c. Many institutional investors, such as pension funds, invest heavily in junk bonds because they are unrestricted in what they can invest in and they want higher yields. d. Yield spreads narrow in times of financial crisis such