题目一：

Given the type of exchange rate regime Country D aims to maintain, it most likely cannot simultaneously:

A allow unrestricted capital flows and pursue an independent fiscal policy.

B pursue an independent fiscal policy and an independent monetary policy.

C allow unrestricted capital flows and pursue an independent monetary policy

解析：

A.Incorrect. C is correct because one of the linkages of greatest concern to investors involves interest rates and exchange rates. The two are inextricably linked. This fact is perhaps most evident in the proposition that a country cannot simultaneously maintain a fixed exchange rate, allow unrestricted capital flows, and pursue an independent monetary policy.

B.Incorrect. C is correct because one of the linkages of greatest concern to investors involves interest rates and exchange rates. The two are inextricably linked. This fact is perhaps most evident in the proposition that a country cannot simultaneously maintain a fixed exchange rate, allow unrestricted capital flows, and pursue an independent monetary policy.

C. Correct. because one of the linkages of greatest concern to investors involves interest rates and exchange rates. The two are inextricably linked. This fact is perhaps most evident in the proposition that a country cannot simultaneously maintain a fixed exchange rate, allow unrestricted capital flows, and pursue an independent monetary policy.

题目二：

Will Country C’s monetary policy most likely affect expected inflation?

A No

B Yes, it will result in lower inflation

C Yes, it will result in higher inflation

解析：

A.Incorrect. B is correct because persistently tight monetary policy ultimately reduces actual and expected inflation resulting in lower, rather than higher, nominal rates.

B.Correct because persistently tight monetary policy ultimately reduces actual and expected inflation resulting in lower, rather than higher, nominal rates.

C. Incorrect. B is correct because persistently tight monetary policy ultimately reduces actual and expected inflation resulting in lower, rather than higher, nominal rates.