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Assume That in the year 2025, the US economy is in a recession that would require a $1 trillion increase in total spending to get

Assume That in the year 2025, the US economy is in a recession that would require a $1 trillion increase in total spending to get back to full employment output. Answer the following questions assuming that the marginal propensity to consume is 0.8.

  1. Identify the least amount of government could spend to get the economy back to full employment. Show work.
  2. Identify the amount of a tax cut to bring the economy back to full employment. Show your work.

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