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3a. In the short-run, in a closed economy, use the Keynesian Cross model to show an economy in a deep recession. According to economists at
3a. In the short-run, in a closed economy, use the Keynesian Cross model to show an economy in a deep recession. According to economists at the Council of Economic Advisors (CEA), the contractionary gap is $400 billion and the marginal propensity to consume is 0.75. What would you recommend the president and congress do, if they could only change government spending (G)? Or if they could only use changes to net taxes (T)? Be specific and show your work.
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