If a flat tax plan allowed individuals to deduct a standard allowance of $20,000 and the flat tax rate was 20 percent, an individual earning $100,000 would pay an average tax rate of 20%

Appleville is a village that specializes in all forms of apple products. Suppose that each winter, when no apples are being produced, the aggregate output falls below the long-run output level. What type of fiscal policy might be most effective to correct this problem?

A) Reducing taxes in order to decrease aggregate demand. B) Increasing government spending in order to increase aggregate demand. C) Decreasing government spending in order to increase aggregate demand. D) Increasing taxes in order to increase aggregate demand.

The European Monetary Union, which preceded the Euro, was

A) opposed by most politicians. B) favored by most economists. C) likely to improve the use of monetary policy to deal with contractionary shocks which strike only one or two countries in Europe. D) all of the above. E) none of the above.