Q1) Suppose the current one-year interest rate is 8%, and financial markets expect the one-year interest rate next year to be 14%. Given this information, the yield to maturity on a two-year bond will be approximately:

Select one:

a.6%.

b.11%.

c.5%.

d.15%.

e.3%.

Q2)Based on an analysis of output growth rates under right wing and left wing governments in Australia, which of the following is true?

Select one:

a.There is no difference in growth rates between the right-wing and the left-wing governments.

b.Growth rates are slightly higher under left-winggovernments.

c.Growth rates are slightly higher under right-winggovernments.

d.Growth rates are significantly higher under right-winggovernments.

e.Growth rates are significantly higher under left-winggovernments.

Q3)In the early 1990s, which nation took the lead in driving up European interest rates?

Select one:

a.Belgium.

b.France.

c.Spain.

d.United Kingdom.

e.Germany.

Q4)If the exchange rate between the Australian dollar and the British pound (the price of the Australian dollar in terms of the pound) is currently 1.50, and is expected to be 1.80 in one year, then the expected rate of:

Select one:

a.depreciation of the Australian dollar is 15%.

b.appreciation of the Australian dollar is 15%.

c.appreciation of the Australian dollar is 18%.

d.appreciation of the Australian dollar is 20%.

e.depreciation of the Australian dollar is 20%.

Q5)Suppose there is a monetary expansion. This monetary expansion will always cause a greater increase in output when accompanied by:

Select one:

a.an increase in expected future output.

b.a decrease in expected future taxes.

c.a decrease in expected future interest rates.

d.All of the above.

e.None of the above.