Mid-term examination - Fall 2016 Thursday, November 3, 2016 Answer all of the following three (3) essay questions. Use the exam booklets provided - recording your student ID and name on all booklets used. All questions are of equal value. 1. Using the liquidity preference framework, explain supply and demand in the money market. 2. Explain the basic facts about the "term structure of interest rates" and how these facts may or may not be explained by the three theories discussed in class. 3. Using the loanable funds model, describe the relationship between bond prices and the interest rate