Problem
A) Given that there is an inflationary GP of 800 Billion dollars and we have an MPC=0.75, calculate the amount of spending that would be necessary to achieve FE-GDP.
B) Using the calculations from (Part A) show the results on the AE and AD/AS graphs. Make sure to use calculations when labeling the graphs.
C) What could the FED do in order to alleviate this? Explain and illustrate your answer in the money market.
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.