1.

In the model of the IS-LM for a closed economy, if interest rates are very close to zero, and there is a sudden drop in consumer confidence A. The government should implement an increase in taxes to increase output. O B. The government may not be able to use expansionary fiscal policy to increase output. O C. The central bank could use expansionary monetary policy to increase output. O D. The central bank may not be able to use monetary policy to increase output. esc CO- F3 F4 F6 F7 a # $ % A & 2 3 4 5 6 8 Q W E R T Y UIf a one year Italian bond has an interest rate of 5.1% and a one year Swiss bond has an interest rate of 4.31%, the current exchange rate Et = 4.8 sfleuro (swiss francs per euro) and the expected exchange rate in t+1 is Et + 1 = 4.71 sfleuro, an Italian investor would prefer to invest in a_ bond and UIP _hold. . .. O A. an Italian bond or a Swiss bond; does O B. a Swiss bond; does O C. an Italian bond; does not O D. a Swiss bond; does not