What happens to disposable personal income if tax rates increased?How could nominal GDP increase but real GDP remain the same?Which is a better indicator of growth in job opportunities: an increase in nominal GDP or real GDP?Is it possible for real GDP to increase and there to be no increase in employment?Determine the effect on GDP for the following.a. Consumption increases.b. Government spending falls.

Since you have posted a question with multiple sub-parts, we will solve the first three subparts for you. To get the remaining sub-parts solved, please repost the complete question and mention the sub-parts to be solved.The tax rate can be a tool used by the government to stabilize the economy. The level of tax illustrates how much disposable income the citizens have to spend on goods, services, and carry out investments. Thus the tax can be used to control the aggregate demand of the economy.Question 1 If the income tax rate increases, the level of disposable income that customers have reduces as a larger portion of the gross income will be paid to the government. Question 2 The nominal GDP is calculated using current year prices. The value of the real GDP is calculated using the current year quantities but base-year prices. It is possible that the real output produced has remained the same, but there is inflation in the current year. Thus, the value of the nominal GDP can increase due to an increase in the price level (i.e., inflation). The real GDP will remove these price effects and show there is no real growth. Question 3 A growth in job opportunities is reflected by a fall in the unemployment rate as now more people can be hired. The level of unemployment in an economy is a real variable and not a nominal one. Therefore, a better indicator of the growth of job opportunities will be an increase in the real GDP.The real GDP can be a better indicator of a country's progress over time as it removes the nominal price effects and shows the country's actual growth in real terms. The real GDP can be compared across time or across countries to identify the progress of the economy.