Problem
1. Suppose that you are the president of a country whose economy is experiencing a mild inflationary gap. Assume, too, that political campaign promises restrict you to a balanced government budget. Is there any way in which fiscal policy can solve your problem? If so, what?
2. Assume that a government increases expenditures by $50 billion, while increasing taxes by $30 billion. If the MCP is 3/4 (and stable), in what direction and by how much should GNP change?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.