Refer to Exhibit 15-3. The economy is currently at point 7. If the economy self-regulates, it will end up at point , whereas if contractionary monetary policy is effective, it will end up at point .

Trey morgan is an employee who is paid monthly. for the month of january of the current year, he earned a total of $4,538. the fica tax for social security is 6.2% of the first $118,500 earned each calendar year, and the fica tax rate for medicare is 1.45% of all earnings for both the employee and the employer. the amount of federal income tax withheld from his earnings was $680.70. his net pay for the month is .