For this question, assume that exchange rates flexible and that the exchange rate expected to occur in one year is not constant. Suppose that individuals now expect that the domestic central bank will pursue expansionary monetary policy in one year. This expected future monetary expansion will cause which of the following to occur?

The government in the country of Zappoo is trying to decide which tax plan to implement. The table above shows three alternative plans. If the government decides to implement a proportional income tax, it will implement tax plan ________

A) A B) B C) C D) None of the above because none of the above are proportional taxes.

If the Fed chooses to sell bonds on the open market, it is attempting to:

a) lower interest rates using expansionary monetary policy. b) lower interest rates using contractionary monetary policy. c) raise interest rates using expansionary monetary policy. d) raise interest rates using contractionary monetary policy.