Problem: Fiscal Policy
A. Calculate and graph what happens to G, AD, GDP, and Prices if the government increases government spending by 100 billion and the MPC = .80.
B. Calculate and graph what happens to T, C, AD, GDP, and Prices if the President raises taxes by 100 billion and the MPC = .80.
C. Calculate and graph what happens to AD, GDP and Prices if the government raises both taxes and government spending by 200 billion and the MPC is equal to .75.