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 5. Demand-pull inflation means that a) High inflation can be due to excessive spending that is pulling up prices. b) High inflation is caused by low interest rates c) High inflation is caused by the increased cost of production d) None of the above 6. Which of the following statements is true? Central banks use monetary policy to: a) Stabilize economic growth. b) Stabilize inflation. c) Control interest rates. d) All of the above. 7. Central banks earn their income by a) Providing services to financial institutions b) Opening ordinary citizens" account c) Giving loans to the businesses d) None of the above 8. The narrow form of money, known as MI includes a) currency + checking deposits b) Savings and short tem deposits c) Long-term deposits in banks d) All of the above 9. Which of the following statement(s) is not associated with the Central Bank of Oman's monetary actions? a) Manage inflation. b) Increase tax revenue of the Government c) Control employment rate. d) Stabilize economic growth