Question 1: (20 pts, Briefly explain whether each of the following statements is true or false a. The higher the price of bonds, the greater the quantity of bonds demanded. b. The lower the price of bonds, the smaller the quantity of bonds supplied c. As the wealth of investors increases, all else held constant, the interest rate on bonds should fall. d. If investors start to believe that the U.S. government might default on its bonds, the interest rate on those bonds will fall Question 2: (30 pts) For each of the following situations, explain whether the demand curve for bonds, the supply curve for bonds, or both would shift. Be sure to indicate whether the curve(s) would shift to the right or to the left. a. The Federal Reserve publishes a forecast that the inflation rate will average 5% over the next five years. Previously, the Fed had been forecasting an inflation rate of 3% b. The economy experiences a period of rapid growth, with rising corporate profits c. The federal government runs a series of budget surpluses. d. Investors believe that the level of risk in the stock market has declined. e. The federal government imposes a tax of S10 per bond on bond sales and bond purchases