(g) (2 points) Suppose the risk premium in the economy falls. This causes the A. IS curve to shift right and the LM curve to shift up. B. LM curve to shift down and the IS curve to shift left. C. IS curve to shift right and the LM stays unchanged. D. IS curve to shift left and the LM curve stays unchanged. (h) (2 points) In the labor market model we studied in class, a decrease in the markup will cause A. an increase in the equilibrium real wage B. a decrease in the equilibrium real wage C. a increase in the natural rate of unemployment D. neither a change in the natural rate of unemployment nor a change in the real wage. (i) (2 points) If the nominal interest rate is 8% and expected inflation is 3%, the expected real interest rate in year t is approximately A. 11%. B. 3%. C. 8%. D. 5%. (j) (2 points) A bank has 100 in assets and 90 in liabilities. Suppose assets pay on average 4% and liabilities cost 3%. What is the expected rate of return on capital? A. 1% B. 12% C. 13% D. -1%