1. With all else being equal, a small increase in the nation's aggregate savings should put a) No pressure on the interest rates. b) Slight downward pressure on the interest rates. c) Slight upward pressure on the interest rates. d) None of the above 2. According to the Pure Expectations Theory, when there is an inverted yield curve (keeping everything else constant) a) It may indicate deflation b) It signals inflation c) A high GDP growth is on the horizon d) None of the above 3. Liquidity Premium Theory states that a) Interest rate expectations have a strong influence on the term structure of interest rates. b) The shape of the yield curve can be used to assess the general expectations of investors and borrowers about future interest rates. c) The term structure of interest rates is determined solely by expectations d) None of the above 4. Investors will require a higher yield on securities that contain the convertibility feature. a) True b) False