Although our development of the Keynesian cross in this chapter assumes that taxes are a fixed amount, most countries levy some taxes that rise automatically with national income. (Examples in the United States include the income tax and the payroll tax.) Let’s represent this type of tax system by writing tax revenue (T) as T = T* + tY, where Y is income, T* is a lump‐sum tax, and t is the marginal tax rate. When income rises by $1, the value of new taxes collected is t × $1.
A. How does this tax system change the way consumption responds to changes in GDP?
B. In the Keynesian cross, how does this tax system alter the government-purchase multiplier?
C. In the IS-LM model, how does this tax system alter the slope of the IS curve?

In 2018, laureen is currently single. she paid $2,800 of qualified tuition and related expenses for each of her twin daughters sheri and meri to attend state university as freshmen ($2,800 each for a total of $5,600). sheri and meri qualify as laureen’s dependents. laureen also paid $1,900 for her son ryan’s (also laureen’s dependent) tuition and related expenses to attend his junior year at state university. finally, laureen paid $1,200 for herself to attend seminars at a community college to her improve her job skills. what is the maximum amount of education credits laureen can claim for these expenditures in each of the following alternative scenarios? a. laureen's agi is $45,000.b. laureen’s agi is $95,000.c. laureen’s agi is $45,000 and laureen paid $12,000 (not $1,900) for ryan to attend graduate school (i. e, his fifth year, not his junior year).