QUESTION 10 [14 Marks] Answer TWO of the following three questions. 10.1 Write an essay in which you discuss the different theories of investment. How empirically relevant are these theories? What lessons have been learnt from these theories? [7] 10.2 Monetary policy over the last few years has developed with targeting movements in inflation as its primary goal. One of the reasons for this development is the various costs associated with inflation and the optimal response is to eliminate some of the costs by maintaining a low rate of inflation. Write an essay in which you identify and discuss the different costs of inflation that a central bank must consider when adopting a policy framework. [7] 10.3 Write an essay in which you discuss the issue of the uncertainty about the motives of fiscal policymakers. What are the proposed strategies to deal with this uncertainty