Question: 1- Suppose a new process was developed that could be used to make oil out of seawater. The equipment required is quite expensive, but it

1- Suppose a new process was developed that could be used to make oil out of seawater. The equipment required is quite expensive, but it would in time lead to low prices for gasoline, electricity, and other types of energy. What effect would this have on interest rates?

2- What does it mean when it is said that the United States is running a trade deficit? What impact will a trade deficit have on interest rates?

3- Suppose you have noticed that the slope of the corporate yield curve has become steeper over the past few months. What factors might explain the change in the slope?

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