Suppose the government used the following formula to compute a family's tax liability: Taxes owed = 28% of income - $8,000 . How much would a family that earned $20,000 owe?

The present position of a nation on its production possibilities curve will influence the future position of the production possibilities curve.

a. true b. false

According to the Keynesian IS—LM model, what is the effect of each of the following on output, the real interest rate, employment, and the price level? Distinguish between the short run and the long run

(a) Expected inflation rises. (b) Wealth increases. (c) Labor supply decreases due to a change in demographics. (d) The future marginal product of capital decreases.