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In 2021, economists forecast the MPS in the U.S. will be .10Estimate the maximum overall effect on national income of the following: An increase in

In 2021, economists forecast the MPS in the U.S. will be .10Estimate the maximum overall effect on national income of the following:

An increase in government spending of $300 billion and a simultaneous increase in taxes of $80 billion.

Explain some reasons why this maximum multiplier impact may not really happen.

If economic recovery is fast and strong in 2021 but there remain many supply shortages, inflation may return as a problem. What changes in fiscal policy would you recommend?

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