1. You accept a new job with a $50,000 annual salary. You plan to contribute 5% to the 401k plan and your employer will match a maximum of 5% contribution. calculate the "employer's cost" for first year of your employ. Show your work.

2. Explain why the liquidity preference theory is so widely accepted. Represent the liquidity premium theory in an equation and explain what forces insure that your equation holds? Explain how the Central Bank policy action is attempting to twist the yield curve.