Business, 15.02.2021 22:10 golderhadashaowtatz

Assume that a hypothetical economy with an MPC of 0.75 is experiencing a severe recession. Instructions: In part a, round your answers to 1 decimal place. Enter your answers as a positive number. In part b, enter your answers as a whole number. a. By how much would government spending have to rise to shift the aggregate demand curve rightward by $25 billion? $ 6.25 billion How large a tax cut would be needed to achieve the same increase in aggregate demand? Tax cut = $ 8.33 billion b. Determine one possible combination of government spending increases and tax increases that would accomplish the same goal without changing the amount of outstanding debt. Increase government spending by $ 3.57 billion Increase taxes by $ 3.57 billion

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Assume that a hypothetical economy with an MPC of 0.75 is experiencing a severe recession. Instructi...

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