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The economy of Priyankandia is experiencing a recessionary gap of $600 billion. If citizens of Priyankandia tend to save 100% of their household income, which
The economy of Priyankandia is experiencing a recessionary gap of $600 billion. If citizens of Priyankandia tend to save 100% of their household income, which of the following fiscal policies is likely to return the economy to full employment?
A. Decrease government spending by $450 billion.
B. Increase government spending by $ 600 billion.
C. Cut taxes by $400 billion.
D. Increase transfer payments by $450 billion.
E. Cut taxes by $600 billion.
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