1.Everything else held constant, suppose the economy is currently producing at the natural rate of output, appreciation of the Candian dollar, in the long-run, decreases inflation rate and increases unemployment rate. TRUE or FALSE? Explain with a graph 2. What will happen to interest rate if there is a sudden increase in people's expectations of future stock prices and an increase in budget deficit. Use the Bond demand and supply diagram to show and explain your answer. 3.Answer the following numerical questions: 1.The current price of a stock is $50 and you plan to sell it in two years. If dividends are expected to be $5 per share for the next two years, and the required return is 10%, what should the price of the stock be when you sell it? 2.You believe that a corporation's dividends will grow 5.5 percent on average forever. If the price of the stock is $100, what should be its next year's dividend payment if the required return is 10%