In 2009, the US Federal government cut taxes by approximately $300 billion, increased government spending by approximately $300 billion, and increased transfer payments by approximately $200 billion. Answer the following questions assuming that the marginal propensity to consume was 0.75.

(a) What was the maximum change in GDP from government spending? Show your work.

(b) What was the maximum change in GDP from the tax cut? Show your work.

(c) What was the maximum change in GDP from the government transfers? Show your work.

(d) If these numbers were accurate, what was the maximum change in GDP from the entire stimulus package? Show your work.

(e) Assume instead that American consumers, fearing an economic collapse, increased their marginal propensity to save to 0.5. Would this increase, decrease, or not change the effectiveness of the stimulus package? Explain.

(f) Assume the marginal propensity to save was 0.5 instead of 0.75. Calculate the maximum change in GDP from the entire stimulus package? Show your work.