1a) Suppose a country's economy is in a recession. Describe the types of policy actions that would beconsidered Keynesian.

1b) Assume the MPC = 3/4. If there is a recessionary gap of $500 billion, by how much would government spending be changed to get back to full employment? Show your work.

Use Okun's Law

2a) If k = 3.5% and c = 2.5, how fast would GDP need to grow to get a 2% drop in unemployment? Show your work.

2b) If k = 3.5%, c = 2.5 and GDP grows by 6%, what is the corresponding change in unemployment? Show your work.