Hi. I did this below question by myself.Can you please let me know if that is right,and if there is anything you can add,and please if is wrong let me know what is the right result.Thanks!

Question 2:Suppose the government of a closed economy reduces taxes by $30 billion. There is no crowding out and the marginal propensity to consume is .

a. What is the initial effect of tax reduction on aggregate demand? What is the total effect of tax cut on aggregate demand?

$30 billions x =$30 billions x 0.75= 22.5 billion

Total effect of tax cut= 22.5 billion x 4= 90 billion

b. How does the total effect of this $30 billion tax cut compare with the total effect of a $30 billion increase in government spending? Why?

m=1/1-mpc=

=1/1-3/4=

=1/1-0.75=

=1/0.25=

= 4

If G was increasing by 30 billion, the total effect = 30billion x 4= 120 billion