1. If the level of business activity decreases (aka we enter a recession), you would expect interest rates and required returns to then _____. (Hint: If we are in a recession, how much are people demanding money to spend? What happens to the price of money based on what you said about demand?)

If the government is currently running a surplus (ha ha), you would expect interest rates and required returns to then _____. (Hint: if the government is running a surplus, are they demanding more or less money? What happens to the price of money based on what you said about demand?)

		Increase; decrease
		Increase; increase
		Decrease; decrease
		Decrease; increase