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The powers of the Texas governor are __________.

Using the same tax brackets in the table above (from Question #34), what is the average tax rate for a person earning $100,000?

Suppose the government decreases taxes. In this scenario, disposable income will _______________ and consumer spending will ____________________.

Income Tax Brackets   Income Range Tax Rate $0 – $20,000 0% $20,001 – $39,000 31% $39,001 – $70,000 42% $70,001 + 50%   Suppose that a nation decides to introduce a new income tax system with the tax brackets shown in the table above. How much tax is owed for a person earning $35,000?

Figure: Aggregate Demand Shifts Suppose the economy is initially at point A in the diagram. If a decrease in investment spending causes a shift of the AD curve from AD1 to AD2, then the government can avoid a short-run recession by:

Figure: A Real Shock After a real shock, the economy is operating at point Y in the figure. Assuming there is no crowding out, fiscal policy that shifts aggregate demand from AD0 to AD2 will move the economy to point:

What is the MOST credible monetary policy action?

A positive real shock leads to:

The Fed will be most effective at changing the money supply when:

Figure: AD and Monetary Policy Suppose a given economy starts at point A in the figure. If the Fed engages in an expansionary monetary policy, what would you expect to happen in the short run?