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?
a. -$8,000
b. -$2,400
c. $0
d. $2,400
b
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What will be an ideal response?
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If the Federal Reserve purchases $1 million in treasury securities, what will be the changes in bank reserves and total checking account deposits in the whole banking system?
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a. 1 b. 0 c. -1 d. equal to the MPC e. equal to the 1/MPC
Which of the following games discussed in the text is a one-shot game?
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