2. How does an increase in income taxes on wage income affect
the labor market and potential GDP?
3. How does an increase in income taxes on interest income
affect the capital market and potential GDP?
4. Using the short-run aggregate supply curve, show the
short-run effects of an increase in government purchases.
Answer the following multiple choice
questions.
5. In 2009, U.S. government expenditures exceeded U.S.
government tax revenues. As a result, the U.S. government had a
budget ____...