Penod: Date: Spending, Tax, and Balanced Budget Multipliers The government decides to purchase $600 million worth of fighter jets. 1. How much is spent in the initial round of spending? 2. What would this do to AD? 3. If the fighter jet employees saved 25% of their income from the sale, what's the MPS? a. What's the MPC? 4. What's the spending multiplier? Show your work. 5. What's the total impact on rGDP from the AAS? Show your work. Instead of spending $600 million on jets, what if the government decided to increase AD by cutting taxes $600 million? 6. How much is spent in the initial round of spending? 7. Using the same MPC and MPS ratios from #3, what is the tax multiplier? Show your work. 8. What is the total impact on the economy from the change to taxes? Show your work