The MPC for an economy is?

Assume that a hypothetical economy with an MPC of 0.9 is experiencing severe recession.?

• Assume that a hypothetical economy with an MPC of 0.9 is experiencing severe recession. By how much would government spending have to increase to shift the aggregate demand curve rightward by $40 billion?How large a tax cut would be needed to achieve this same increase in aggregate demand? Determine the balanced budget expenditure and tax increase that would accomplish the same goal. Balanced budget expenditure and tax increase would be

• Answer:

  that would be really bad