1. Suppose that an economy is in the middle of a recession and government policy makers want to increase aggregate demand by $750 billion. If the economy's Marginal propensity to consume is 0.7 and there is no crowding out, the government should do which fiscal policy action? B. Find the Spending multiplier.

2. If the reserve requirement is 5% for banks with more than $16.3 million-$124.2 million in deposits. How much needs to be kept on reserve for a bank with $60 million in deposits?

3. Describe and GRAPH the three phases of the AS curve.

4. Explain 2 main points of Fiscal policy.

5. Illustrate graphically what occurs to AD when there is a decrease in government spending.