Using the

 Mundell-Fleming model under flexible exchange rates and perfect capital mobility:

A. solve the model for the equilibrium level of income and the exchange rate, providing an algebraic solution for these endogenous variables as a function of the exogenous variables in the model.

B. With regards to the determinants of exchange rate changes, how does the Mundell-Fleming model and the monetary approach to exchange rates differ? Please explain using the algebraic results of part A, but also providing the economic differences in the two approaches to explaining exchange rate changes. B. What is the effect on the equilibrium level of income and the exchange rate of an exogenous

increase in the world interest rate. Illustrate graphically and algebraically

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For a taxpayer with Single Filing Status, the Federal Tax Rate Schedule for the year 2017 is as follows:

 Taxable Income not over $9,325: 10% of the taxable income

 Taxable Income over $9,325 but not over $37,950: $932.50 plus 15% of the excess taxable income over $9,325

 Taxable Income over $37,950 but not over $91,900: $5,226.25 plus 25% of the excess taxable income over $37,950

Note: This is just the first three “brackets” but we’ll stop here.

4. We can think of our Income Tax Function as a piecewise function. I’ve given you a majority of the function describing the first three brackets. Note that ????(????) represents the tax liability and ???? represents the taxable income. (a) Fill in the missing information below: ????(????)={0.10????932.50+0.15(????−9325)________________+0.25(????− _________________) 0≤????≤93259325<????≤3795037950<????≤__________________

(b) Use the completed function to calculate the following tax liabilities:

????(9000)=__________________________________

????(12,000)=________________________________

????(55,000)= ________________________________

5. Now, graph the function on the axes below. Label each segment with its slope. Make sure the values you calculated in Question #4(b) agree with your graph!