Question 5: The yield curve appears to be a good predictor of future real activity. Explain the theories or hypotheses behind this claim and critically discuss any limitations or pitfalls. Question 6: Consider the real business cycle (REC) model covered in this course. Discuss how this model can be modied, by changing any assumptions about or features in the model, so as to explain (i) the acyclical real wage observed in the data, and (ii) the plausibility of a self-fullling recession