We Would Expect Which of the Following to Occur When

question 50

Multiple Choice

We would expect which of the following to occur when the central bank pursues contractionary monetary policy?

• A) No change in bond prices and an increase in i.
• B) A decrease in bond prices and an increase in i.
• C) A decrease in bond prices and a decrease in i.
• D) An increase in bond prices and an increase in the interest rate (i).
• E) An increase in bond prices and a decrease in i.

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Definitions:

Head of Household

A tax filing status for unmarried individuals that provides a higher standard deduction and lower tax rates than the Single filing status, if they have a qualifying person living with them.

Standard Deduction

A fixed dollar amount deducted from an individual's taxable income, reducing the amount of income subject to federal income tax, which varies by filing status and is adjusted annually.

Personal Exemption

A deduction allowed by the IRS from taxable income for the taxpayer and each qualified dependent, diminishing until eliminated in tax year 2018 under the Tax Cuts and Jobs Act.

AGI

Adjusted Gross Income; an individual's total gross income minus specific deductions, used to determine taxable income.