Suppose in an economy household consumption can be described by C = 50 + 0.75(Y - T)
a) If the government wants to boost GDP by $20 billion, how much will they need to increase government spending by?
b) Suppose the government wants to boost GDP by $20 billion but by changing taxes instead of government spending. How much would they need to change taxes by?
c) Suppose the government wants to boost GDP by $20 billion but also wants to not add to any budget deficit. What would they need to change government spending and taxes together by in order to accomplish that.