Assume that the MPC is 0.75. Full employment is considered to be at a GDP level of $500 billion

| November 24, 2016

Assume that the MPC is 0.75. Full employment is considered to be at a GDP level of $500 billion. The GDP is $600 billion. What should the government do to achieve full employment?

a. increase spending by $25 billionb. increase spending by $10 billionc. reduce spending by $25 billion
d. reduce spending by $100 billion

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