for protech
Assume that a hypothetical economy with an MPC of 0.75 is experiencing a severe recession.
By how much would government spending have to rise to shift the aggregate demand curve rightward by $50 billion?
Instructions: Round your answer to two decimal places.
$ [removed] billion
How large a tax cut would be needed to achieve the same increase in aggregate demand?
Instructions: Round your answer to two decimal places. Enter a positive value.
$ [removed] billion
Determine one possible combination of government spending increases and tax increases that would accomplish the same goal.
Increase spending by $ [removed] billion and increase taxes by $ [removed] billion.