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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?

Which of the graphs shows the correct shape for the Solow growth curve?   A.   B.   C.   D.