Assume the marginal tax rate is 12 percent for the first $40,000 of income, 28 percent for income between $40,000 and $100,000, and 30 percent for any income over $100,000. If Sarah has taxable income equal to $120,000 for the year, what is her tax bill?

Suppose the marginal propensity to consume is 0.75. A $150 billion increase in government spending shifts the IS curve

A) to the right by $50 billion. B) to the left by $50 billion. C) to the left by $600 billion. D) to the right by $600 billion.

Crowding out refers to the situation in which:

a. foreigners sell their bonds and purchase U.S. goods and services. b. borrowing by the federal government raises interest rates and causes firms to invest less. c. increased federal taxes to balance the budget causes interest rates to increase and consumer credit decreases. d. borrowing by the federal government causes state and local governments to lower their taxes.