Solved: Country a has an mpc of 08 and country b has an mpc of 06, Dissertation

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Country a has an mpc of 08 and country b has an mpc of 06

a) Two countries are in a recession. Country A has an MPC of 0.8 and Country B has an MPC of 0.6. In which country will government spending have the greatest impact?

b) If there is a recessionary gap of $100 billion, should the government increase spending by $100 billion to close the gap? Why or why not?

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Dissertation: Country a has an mpc of 08 and country b has an mpc of 06

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