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Fiscal Policy Changes Suppose an economy is currently experiencing an inflationary gap of $200 billion. The government wants to use fiscal policy to close this

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Fiscal Policy Changes Suppose an economy is currently experiencing an inflationary gap of $200 billion. The government wants to use fiscal policy to close this gap using the spending multiplier. Given that the MPC is 0.8, calculate the changes in government expenditures needed to close the gap. In an economy facing a recessionary gap of $150 billion, the government decides to use fiscal policy to stimulate aggregate demand and close the gap using the spending multiplier. If the MPC is 0.75, determine the necessary changes in government expenditures. An economy is facing an inflationary gap of $300 billion. If the MPC is 0.5, calculate the changes in government expenditures and taxes needed to close the gap. Additionally, determine the value of the marginal propensity to save Suppose an economy has a recessionary gap of $120 billion. If the MPC is 0.25 and planned investment decreases by S50 billion, calculate the changes in government expenditures and taxes required to close the gap using the spending multiplier

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