1) If an economy is 2 percent below the long-run Solow growth rate, the federal government can offset a recession with a 2 percent increase in discretionary spending.

True

False

2)

In a progressive tax system, if a person moves from one income bracket to a higher income bracket:

a) both the marginal tax rate and average tax rate will be higher.

b) both the marginal tax rate and average tax rate will be lower.

c) the marginal tax rate will be lower and the average tax rate will be higher.

d) the marginal tax rate will be higher and the average tax rate will be lower.