Problem
Answer the following:
a. MPS = .4. What is the government spending multiplier?
b. MPC = .9. What is the government spending multiplier?
c. MPS = .5. What is the government spending multiplier?
d. MPC = .75. What is the tax multiplier?
e. MPS = .1. What is the tax multiplier?
f. If the government spending multiplier is 6, what is the tax multiplier?
g. If the tax multiplier is -2, what is the government spending multiplier?
h. If government purchases and taxes are increased by $100 billion simultaneously, what will the effect be on equilibrium output (income)?
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.